Covenant Logistics Group (Covenant Logistics Group) ROC % : 5.36% (As of Dec. 2023)

Covenant Logistics Group ROC % Chart

Covenant Logistics Group Annual Data
	Trend	Dec14	Dec15	Dec16	Dec17	Dec18	Dec19	Dec20	Dec21	Dec22	Dec23
ROC %		Get a 7-Day Free Trial					0.69	0.61	8.49	10.60	4.79

Covenant Logistics Group Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															3.70	4.65	5.75	5.36	1.96

Covenant Logistics Group ROC % Calculation

Covenant Logistics Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

where

Covenant Logistics Group's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

where

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Covenant Logistics Group  (NAS:CVLG) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Covenant Logistics Group's WACC % is 8.90%. Covenant Logistics Group's ROC % is 4.70% (calculated using TTM income statement data). Covenant Logistics Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

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Covenant Logistics Group (Covenant Logistics Group) Business Description