CyberAgent (TSE:4751) ROC %

: -0.90% (As of Dec. 2023)

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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 %. CyberAgent's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -0.90%.

As of today (2024-04-19), CyberAgent's WACC % is 5.81%. CyberAgent's ROC % is 10.68% (calculated using TTM income statement data). CyberAgent 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.

CyberAgent ROC % Historical Data

The historical data trend for CyberAgent'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.

CyberAgent Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

ROC %

13.74

22.95

70.09

33.65

7.84

CyberAgent Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %																-237.92	30.19	1.84	10.04	-0.90

CyberAgent ROC % Calculation

CyberAgent's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2023 is calculated as:

	ROC % (A: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2022 )	+	Invested Capital (A: Sep. 2023 ))	/ count )
=	24557 * ( 1 - 51.43% )	/	( (139660	+	164552)	/ 2 )
=	11927.3349	/	152106
=	7.84 %

where

	Invested Capital		(A: Sep. 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	))
=	383698	-	80202	-	( 182364	-	max(0, 130014	-	293850	+	182364	))
=	139660

	Invested Capital		(A: 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	))
=	477826	-	95394	-	( 218613	-	max(0, 133362	-	351242	+	218613	))
=	164552

CyberAgent's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	25140 * ( 1 - 106.28% )	/	( (164552	+	187398)	/ 2 )
=	-1578.792	/	175975
=	-0.90 %

where

	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	))
=	477826	-	95394	-	( 218613	-	max(0, 133362	-	351242	+	218613	))
=	164552

	Invested Capital		(Q: Dec. 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	))
=	468681	-	78678	-	( 202605	-	max(0, 132819	-	342589	+	202605	))
=	187398

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

CyberAgent (TSE:4751) 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, CyberAgent's WACC % is 5.81%. CyberAgent's ROC % is 10.68% (calculated using TTM income statement data). CyberAgent 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.

CyberAgent ROC % Related Terms

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CyberAgent (TSE:4751) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » CyberAgent Inc (TSE:4751) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

CYGIY:USA CYAGF:USA CL2:Germany

Address

hibuya Mark City West 1-12-1 Dogenzaka, Shibuya-Ku, Tokyo, JPN, 150-0043

Website

http://www.cyberagent.co.jp

CyberAgent is one of the top digital advertising companies in Japan. Its main business is internet advertising, which accounts for over 50% of companywide revenue. Currently, it is one of the market leaders, with about 12% market share in the digital advertisement market, alongside Dentsu with 13% and Hakuhodo with 11%. It also operates a video game segment (about 20% of total revenue) and a media segment, which is mainly Abema, an online TV program streaming site (about 20% of total revenue).

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