Wesfarmers (ASX:WES) ROCE %

: 22.23% (As of Dec. 2023)

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ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Wesfarmers's annualized ROCE % for the quarter that ended in Dec. 2023 was 22.23%.

Wesfarmers ROCE % Historical Data

The historical data trend for Wesfarmers's ROCE % 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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Wesfarmers Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROCE %

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14.86

16.03

19.15

18.63

19.66

Wesfarmers Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROCE %	Get a 7-Day Free Trial															20.53	18.48	21.86	16.80	22.23

Wesfarmers ROCE % Calculation

Wesfarmers's annualized ROCE % for the fiscal year that ended in Jun. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Jun. 2023 )		(A: Jun. 2022 )		(A: Jun. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Jun. 2023 )		(A: Jun. 2022 )		(A: Jun. 2023 )
	=	3644	/	( ( (27271 - 8893)	+	(26546 - 7857) )	/ 2 )
	=	3644	/	( (18378	+	18689)	/ 2 )
	=	3644	/	18533.5
	=	19.66 %

Wesfarmers's ROCE % of for the quarter that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Dec. 2023 )		(Q: Jun. 2023 )		(Q: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Dec. 2023 )		(Q: Jun. 2023 )		(Q: Dec. 2023 )
	=	4162	/	( ( (26546 - 7857)	+	(27291 - 8538) )	/ 2 )
	=	4162	/	( ( 18689	+	18753 )	/ 2 )
	=	4162	/	18721
	=	22.23 %

(1) Note: The EBIT data used here is two times the semi-annual (Dec. 2023) EBIT data.

Wesfarmers (ASX:WES) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

Wesfarmers ROCE % Related Terms

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Wesfarmers (ASX:WES) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Wesfarmers Ltd (ASX:WES) » Definitions » ROCE %

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WFAFY:USA WFAFF:USA WF3:Germany

Address

123 St Georges Terrace, Level 14, Brookfield Place Tower 2, Perth, WA, AUS, 6000

Website

https://www.wesfarmers.com.au

Wesfarmers is Australia's largest conglomerate. Its retail operations include the Bunnings hardware chain (number one in market share), discount department stores Kmart and Target (number one and three) and Officeworks in office supplies (number one). These activities account for the vast majority of group earnings before taxes. Other operations include chemicals, fertilisers, industrial and medical gases, LPG production and distribution, and industrial and safety supplies. Management is focused on generating cash and creating shareholder wealth in the long term.