Guoco Group (Guoco Group) ROC % : 3.90% (As of Dec. 2023)

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What is Guoco Group ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Guoco Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 3.90%.

As of today (2024-04-27), Guoco Group's WACC % is 4.45%. Guoco Group's ROC % is 2.75% (calculated using TTM income statement data). Guoco Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Guoco Group ROC % Historical Data

The historical data trend for Guoco Group's ROC % can be seen below:

* 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.

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Guoco Group ROC % Chart

Guoco Group Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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3.17

2.98

0.22

1.92

1.53

Guoco Group Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															2.87	0.73	1.53	1.49	3.90

Guoco Group ROC % Calculation

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

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	213.159 * ( 1 - 4.26% )	/	( (13338.188	+	13395.184)	/ 2 )
=	204.0784266	/	13366.686
=	1.53 %

where

	Invested Capital		(A: Jun. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	16598.561	-	636.447	-	( 2623.926	-	max(0, 2370.46	-	6066.793	+	2623.926	))
=	13338.188

	Invested Capital		(A: Jun. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	16937.697	-	672.097	-	( 2870.416	-	max(0, 1994.114	-	6093.699	+	2870.416	))
=	13395.184

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

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	594.838 * ( 1 - 10.59% )	/	( (13395.184	+	13879.073)	/ 2 )
=	531.8446558	/	13637.1285
=	3.90 %

where

	Invested Capital		(Q: Jun. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	16937.697	-	672.097	-	( 2870.416	-	max(0, 1994.114	-	6093.699	+	2870.416	))
=	13395.184

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	17584.182	-	720.694	-	( 2984.415	-	max(0, 3132.113	-	6419.252	+	2984.415	))
=	13879.073

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Guoco Group (OTCPK:GULRY) 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, Guoco Group's WACC % is 4.45%. Guoco Group's ROC % is 2.75% (calculated using TTM income statement data). Guoco 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.

Guoco Group ROC % Related Terms

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Guoco Group (Guoco Group) Business Description

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GULRF:USA 00053:Hong Kong

Address

99 Queen's Road Central, 50th Floor, The Center, Hong Kong, HKG

Website

https://www.guoco.com

Guoco Group Ltd is a holdings company engaged in investment and financial businesses globally. The company operates in four main segments: principal investment, property development and investment, hospitality and leisure, and financial services. It generates additional revenue from oil and gas production. Principal investment segment covers direct and equity investments, and treasury operations. The property development and investment segment, develops residential and commercial properties in China and Southeast Asia. The main revenue driver, hospitality and leisure segment owns, leases, and manages hotels, and operates gaming businesses in the UK, Spain and Belgium. The financial-services segment includes commercial, consumer and investment banking, as well as insurance services.