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Taylor Devices ROC %

: -8.42% (As of Nov. 2020)
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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Taylor Devices's annualized return on capital (ROC %) for the quarter that ended in Nov. 2020 was -8.42%.

As of today (2021-01-17), Taylor Devices's WACC % is 5.85%. Taylor Devices's ROC % is 4.54% (calculated using TTM income statement data). Taylor Devices earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Taylor Devices ROC % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Taylor Devices Annual Data
May11 May12 May13 May14 May15 May16 May17 May18 May19 May20
ROC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 17.32 8.39 1.38 7.98 10.40

Taylor Devices Quarterly Data
Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20
ROC % 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 Premium Member Only Premium Member Only Premium Member Only 12.54 11.03 14.73 2.61 -8.42

Taylor Devices ROC % Calculation

Taylor Devices's annualized Return on Capital (ROC %) for the fiscal year that ended in May. 2020 is calculated as:

ROC % (A: May. 2020 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: May. 2019 ) + Invested Capital (A: May. 2020 ))/ count )
=3.303 * ( 1 - 11.3% )/( (30.826 + 25.504)/ 2 )
=2.929761/28.165
=10.40 %

where

Taylor Devices's annualized Return on Capital (ROC %) for the quarter that ended in Nov. 2020 is calculated as:

ROC % (Q: Nov. 2020 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Aug. 2020 ) + Invested Capital (Q: Nov. 2020 ))/ count )
=-2.68 * ( 1 - 19.38% )/( (25.697 + 25.596)/ 2 )
=-2.160616/25.6465
=-8.42 %

where

Note: The Operating Income data used here is four times the quarterly (Nov. 2020) data.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Taylor Devices  (NAS:TAYD) 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, Taylor Devices's WACC % is 5.85%. Taylor Devices's ROC % is 4.54% (calculated using TTM income statement data). Taylor Devices 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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