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# Swire Properties ROC %

: 1.84% (As of Dec. 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 %. Swire Properties's annualized return on capital (ROC %) for the quarter that ended in Dec. 2020 was 1.84%.

As of today (2021-05-18), Swire Properties's WACC % is 5.95%. Swire Properties's ROC % is 1.76% (calculated using TTM income statement data). Swire Properties earns returns that do not match up to its cost of capital. It will destroy value as it grows.

## Swire Properties ROC % Historical 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.

 Swire Properties Annual Data Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 ROC % 2.78 3.01 2.52 2.26 1.76

 Swire Properties Semi-Annual Data Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 ROC % 2.24 2.50 2.02 1.53 1.84

## Swire Properties ROC % Calculation

Swire Properties's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2020 is calculated as:

 ROC % (A: Dec. 2020 ) = NOPAT / Average Invested Capital = Operating Income * ( 1 - Tax Rate % ) / ( (Invested Capital (A: Dec. 2019 ) + Invested Capital (A: Dec. 2020 )) / count ) = 1042.0671061288 * ( 1 - 30.52% ) / ( (41683.644051509 + 40418.994053071) / 2 ) = 724.0282253383 / 41051.31905229 = 1.76 %

where

 Invested Capital (A: Dec. 2019 ) = 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 )) = 43290.92190403 - 945.86456531488 - ( 1920.0461272343 - max(0, 1982.5741559357 - 2643.9874431418 + 1920.0461272343 )) = 41683.644051509

 Invested Capital (A: Dec. 2020 ) = 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 )) = 43523.136263368 - 864.30423509075 - ( 2738.941420813 - max(0, 1365.2136895471 - 3605.0516647532 + 2738.941420813 )) = 40418.994053071

Swire Properties's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2020 is calculated as:

 ROC % (Q: Dec. 2020 ) = NOPAT / Average Invested Capital = Operating Income * ( 1 - Tax Rate % ) / ( (Invested Capital (Q: Jun. 2020 ) + Invested Capital (Q: Dec. 2020 )) / count ) = 1021.6850062565 * ( 1 - 26.66% ) / ( (40985.535670507 + 40418.994053071) / 2 ) = 749.30378358854 / 40702.264861789 = 1.84 %

where

 Invested Capital (Q: Jun. 2020 ) = 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 )) = 42755.835408575 - 784.50600637411 - ( 1449.9167752674 - max(0, 1430.0460639218 - 2415.8397956155 + 1449.9167752674 )) = 40985.535670507

 Invested Capital (Q: Dec. 2020 ) = 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 )) = 43523.136263368 - 864.30423509075 - ( 2738.941420813 - max(0, 1365.2136895471 - 3605.0516647532 + 2738.941420813 )) = 40418.994053071

Note: The Operating Income data used here is two times the semi-annual (Dec. 2020) 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.

Swire Properties  (OTCPK:SWPFF) 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, Swire Properties's WACC % is 5.95%. Swire Properties's ROC % is 1.76% (calculated using TTM income statement data). Swire Properties 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.