Highest Performances Holdings (Highest Performances Holdings) ROC % : -167.08% (As of Jun. 2023)

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What is Highest Performances Holdings 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 %. Highest Performances Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2023 was -167.08%.

As of today (2024-05-10), Highest Performances Holdings's WACC % is 2.72%. Highest Performances Holdings's ROC % is -39.29% (calculated using TTM income statement data). Highest Performances Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Highest Performances Holdings ROC % Historical Data

The historical data trend for Highest Performances Holdings'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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Highest Performances Holdings ROC % Chart

Highest Performances Holdings Annual Data

Trend

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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58.10

-49.37

-43.74

-34.19

-42.61

Highest Performances Holdings Semi-Annual Data
	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23
ROC %	Get a 7-Day Free Trial								-64.84	-47.83	-23.15	-31.83	-167.08

Highest Performances Holdings ROC % Calculation

Highest Performances Holdings'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 )
=	-7.979 * ( 1 - -24.54% )	/	( (34.09	+	12.547)	/ 2 )
=	-9.9370466	/	23.3185
=	-42.61 %

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	))
=	69.294	-	5.443	-	( 29.761	-	max(0, 24.962	-	58.961	+	29.761	))
=	34.09

	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	))
=	37.916	-	2.403	-	( 22.966	-	max(0, 4.338	-	33.233	+	22.966	))
=	12.547

Highest Performances Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2023 is calculated as:

	ROC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2022 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	-5.476 * ( 1 - -551.15% )	/	( (30.135	+	12.547)	/ 2 )
=	-35.656974	/	21.341
=	-167.08 %

where

	Invested Capital		(Q: 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	))
=	46.517	-	5.591	-	( 10.791	-	max(0, 9.218	-	38.119	+	10.791	))
=	30.135

	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	))
=	37.916	-	2.403	-	( 22.966	-	max(0, 4.338	-	33.233	+	22.966	))
=	12.547

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

Highest Performances Holdings (NAS:HPH) 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, Highest Performances Holdings's WACC % is 2.72%. Highest Performances Holdings's ROC % is -39.29% (calculated using TTM income statement data). Highest Performances Holdings 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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Highest Performances Holdings (Highest Performances Holdings) Business Description

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GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Highest Performances Holdings Inc (NAS:HPH) » Definitions » ROC %

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Address

No. 15 Zhujiang West Road, 42nd Floor, Pearl River Tower, Zhujiang New Town, Tianhe, Guangdong Province, Guangzhou, CHN

Website

https://www.puyiwm.com

Puyi Inc is the third-party wealth management services provider in China. The company provides wealth management services, corporate finance services and asset management services. It generates a majority of the revenue from wealth management services under which it distributes wealth management products both online and offline through its branch network. Products distributed online include publicly raised fund products, exchange administered products and asset management plans. Products distributed offline include privately raised fund products. In addition, the company also has a corporate finance services business, under which it provides corporate borrowers with financing solutions, including product design, identification of sources of funding, compliance and risk management.