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Hollysys Automation Technologies (Hollysys Automation Technologies) ROC % : 14.86% (As of Sep. 2023)


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What is Hollysys Automation Technologies 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 %. Hollysys Automation Technologies's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was 14.86%.

As of today (2024-04-28), Hollysys Automation Technologies's WACC % is 7.20%. Hollysys Automation Technologies's ROC % is 12.82% (calculated using TTM income statement data). Hollysys Automation Technologies generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.


Hollysys Automation Technologies ROC % Historical Data

The historical data trend for Hollysys Automation Technologies'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.

* Premium members only.

Hollysys Automation Technologies ROC % Chart

Hollysys Automation Technologies Annual Data
Trend Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23
ROC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 18.44 13.90 11.48 8.94 11.25

Hollysys Automation Technologies Quarterly Data
Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23
ROC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.67 23.65 4.39 8.69 14.86

Hollysys Automation Technologies ROC % Calculation

Hollysys Automation Technologies'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 )
=93.013 * ( 1 - 9.61% )/( (722.559 + 771.612)/ 2 )
=84.0744507/747.0855
=11.25 %

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))
=1671.773 - 257.257 - ( 691.957 - max(0, 484.556 - 1462.567+691.957))
=722.559

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))
=1684.848 - 268.402 - ( 644.834 - max(0, 470.145 - 1424.935+644.834))
=771.612

Hollysys Automation Technologies's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

ROC % (Q: Sep. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2023 ) + Invested Capital (Q: Sep. 2023 ))/ count )
=137.004 * ( 1 - 14.31% )/( (771.612 + 808.322)/ 2 )
=117.3987276/789.967
=14.86 %

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))
=1684.848 - 268.402 - ( 644.834 - max(0, 470.145 - 1424.935+644.834))
=771.612

Invested Capital(Q: Sep. 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))
=1766.488 - 275.653 - ( 682.513 - max(0, 498.308 - 1500.001+682.513))
=808.322

Note: The Operating Income data used here is four times the quarterly (Sep. 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.


Hollysys Automation Technologies  (NAS:HOLI) 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, Hollysys Automation Technologies's WACC % is 7.20%. Hollysys Automation Technologies's ROC % is 12.82% (calculated using TTM income statement data). Hollysys Automation Technologies generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.


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.


Hollysys Automation Technologies ROC % Related Terms

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Hollysys Automation Technologies (Hollysys Automation Technologies) Business Description

Traded in Other Exchanges
Address
No. 2 Disheng Middle Road, Beijing Economic-Technological Development Area, Beijing, CHN, 100176
Hollysys Automation Technologies Ltd is a China-based company that provides automation and control technologies and products. The company operates through three segments. Its IA segment supplies solutions including third-party hardware-centric products, proprietary software products, and others. The Rail segment supplies train control center and automation train protection to the rail and subway industries. The M&E segment consists of its two Southeast Asia-based subsidiaries that provide mechanical and electrical solutions. Hollysys Automation Technologies generates most of its sales from the Chinese domestic market.

Hollysys Automation Technologies (Hollysys Automation Technologies) Headlines