Brown (N) Group (Brown (N) Group) ROC % : 1.14% (As of Aug. 2023)

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What is Brown (N) 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 %. Brown (N) Group's annualized return on capital (ROC %) for the quarter that ended in Aug. 2023 was 1.14%.

As of today (2024-04-29), Brown (N) Group's WACC % is 5.76%. Brown (N) Group's ROC % is 1.68% (calculated using TTM income statement data). Brown (N) Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Brown (N) Group ROC % Historical Data

The historical data trend for Brown (N) 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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Brown (N) Group ROC % Chart

Brown (N) Group Annual Data

Trend

Feb14

Feb15

Feb16

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

ROC %

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10.92

6.79

4.94

5.90

1.89

Brown (N) Group Semi-Annual Data
	Feb14	Aug14	Feb15	Aug15	Feb16	Aug16	Feb17	Aug17	Feb18	Aug18	Feb19	Aug19	Feb20	Aug20	Feb21	Aug21	Feb22	Aug22	Feb23	Aug23
ROC %	Get a 7-Day Free Trial															6.47	5.16	1.98	2.03	1.14

Brown (N) Group ROC % Calculation

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

	ROC % (A: Feb. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Feb. 2022 )	+	Invested Capital (A: Feb. 2023 ))	/ count )
=	26.087 * ( 1 - 27.71% )	/	( (1079.296	+	912.439)	/ 2 )
=	18.8582923	/	995.8675
=	1.89 %

where

	Invested Capital		(A: Feb. 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	))
=	1208.119	-	79.161	-	( 49.662	-	max(0, 171.719	-	901.488	+	49.662	))
=	1079.296

	Invested Capital		(A: Feb. 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	))
=	990.338	-	52.899	-	( 25	-	max(0, 100.242	-	789.251	+	25	))
=	912.439

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

	ROC % (Q: Aug. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Feb. 2023 )	+	Invested Capital (Q: Aug. 2023 ))	/ count )
=	16.772 * ( 1 - 39.02% )	/	( (912.439	+	884.371)	/ 2 )
=	10.2275656	/	898.405
=	1.14 %

where

	Invested Capital		(Q: Feb. 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	))
=	990.338	-	52.899	-	( 25	-	max(0, 100.242	-	789.251	+	25	))
=	912.439

	Invested Capital		(Q: Aug. 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	))
=	1004.574	-	57.814	-	( 62.389	-	max(0, 110.419	-	797.713	+	62.389	))
=	884.371

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

Brown (N) Group (OTCPK:NBRNF) 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, Brown (N) Group's WACC % is 5.76%. Brown (N) Group's ROC % is 1.68% (calculated using TTM income statement data). Brown (N) 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.

Brown (N) Group ROC % Related Terms

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Brown (N) Group (Brown (N) Group) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Brown (N) Group PLC (OTCPK:NBRNF) » Definitions » ROC %

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BWNG:UK

Address

40 Lever Street, Griffin House, Manchester, GBR, M60 6ES

Website

https://www.nbrown.co.uk

Brown (N) Group PLC is an apparel, footwear, and homeware retailer, based in the UK. The company's main brands are Simply Be JD Williams, and Jacamo. The JD Williams brand is targeted to plus-size consumers with ranges for women, men, home, and kids. Simply Be offers fashion items to women of all sizes, while Jacamo offers collections for men in a wide size range (from small to 5XL). The main markets are the United Kingdom, Ireland, and the United States. The company offers also credit-line facilities to its customers. N Brown Group offers products mainly through the online channel; however, the company also owns stores.