China Medical & HealthCare Group Limited (HKSE:00383) ROC % : 1.33% (As of Dec. 2023)

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What is China Medical & HealthCare Group Limited 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 %. China Medical & HealthCare Group Limited's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 1.33%.

As of today (2024-05-06), China Medical & HealthCare Group Limited's WACC % is 6.59%. China Medical & HealthCare Group Limited's ROC % is 1.09% (calculated using TTM income statement data). China Medical & HealthCare Group Limited earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China Medical & HealthCare Group Limited ROC % Historical Data

The historical data trend for China Medical & HealthCare Group Limited'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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China Medical & HealthCare Group Limited ROC % Chart

China Medical & HealthCare Group Limited Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Dec20

Dec21

Dec22

Dec23

ROC %

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-0.41

-0.23

1.30

1.09

China Medical & HealthCare Group Limited Semi-Annual Data
	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															1.23	-0.08	0.09	0.32	1.33

China Medical & HealthCare Group Limited ROC % Calculation

China Medical & HealthCare Group Limited's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	51.487 * ( 1 - 42.12% )	/	( (2828.021	+	2663.186)	/ 2 )
=	29.8006756	/	2745.6035
=	1.09 %

where

	Invested Capital		(A: Dec. 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	))
=	3232.534	-	501.798	-	( 601.139	-	max(0, 1130.718	-	1033.433	+	601.139	))
=	2828.021

	Invested Capital		(A: 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	))
=	3617.395	-	738.313	-	( 896.89	-	max(0, 1144.872	-	1360.768	+	896.89	))
=	2663.186

China Medical & HealthCare Group Limited'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 )
=	58.358 * ( 1 - 38.87% )	/	( (2721.521	+	2663.186)	/ 2 )
=	35.6742454	/	2692.3535
=	1.33 %

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	))
=	3439.059	-	596.693	-	( 830.026	-	max(0, 1155.261	-	1276.106	+	830.026	))
=	2721.521

	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	))
=	3617.395	-	738.313	-	( 896.89	-	max(0, 1144.872	-	1360.768	+	896.89	))
=	2663.186

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

China Medical & HealthCare Group Limited (HKSE:00383) 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, China Medical & HealthCare Group Limited's WACC % is 6.59%. China Medical & HealthCare Group Limited's ROC % is 1.09% (calculated using TTM income statement data). China Medical & HealthCare Group Limited 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.

China Medical & HealthCare Group Limited ROC % Related Terms

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China Medical & HealthCare Group Limited (HKSE:00383) Business Description

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GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » China Medical & HealthCare Group Limited (HKSE:00383) » Definitions » ROC %

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COLRF:USA SMI:Germany

Address

333 Lockhart Road, 47th Floor, United Asia Finance Centre, Wanchai, Hong Kong, HKG

Website

http://www.cmhg.com.hk

China Medical & HealthCare Group Ltd is a healthcare company operating hospitals. Its main focus is on the investment, management, and operations of healthcare and hospital businesses, eldercare businesses, trading of medical equipment and related supplies, property investment and development, securities trading and investments, provision of financial services, and strategic investment. It operates through the following business segments: Healthcare, Eldercare; Property development; Property investment; Financial services; and Securities trading and investments. The firm generates the majority of revenue from the Healthcare segment that is engaged in the operations of hospitals in the PRC.

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