TransAlta Renewables (TSX:RNW) ROCE % : 3.98% (As of Jun. 2023)

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What is TransAlta Renewables ROCE %?

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. TransAlta Renewables's annualized ROCE % for the quarter that ended in Jun. 2023 was 3.98%.

TransAlta Renewables ROCE % Historical Data

The historical data trend for TransAlta Renewables'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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TransAlta Renewables ROCE % Chart

TransAlta Renewables Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

ROCE %

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9.45

6.61

4.91

5.96

4.64

TransAlta Renewables Quarterly Data
	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23
ROCE %	Get a 7-Day Free Trial															4.01	-1.90	8.62	8.88	3.98

TransAlta Renewables ROCE % Calculation

TransAlta Renewables's annualized ROCE % for the fiscal year that ended in Dec. 2022 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Dec. 2022 )		(A: Dec. 2021 )		(A: Dec. 2022 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Dec. 2022 )		(A: Dec. 2021 )		(A: Dec. 2022 )
	=	141	/	( ( (3749 - 593)	+	(3229 - 306) )	/ 2 )
	=	141	/	( (3156	+	2923)	/ 2 )
	=	141	/	3039.5
	=	4.64 %

TransAlta Renewables's ROCE % of for the quarter that ended in Jun. 2023 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Jun. 2023 )		(Q: Mar. 2023 )		(Q: Jun. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Jun. 2023 )		(Q: Mar. 2023 )		(Q: Jun. 2023 )
	=	116	/	( ( (3235 - 301)	+	(3133 - 241) )	/ 2 )
	=	116	/	( ( 2934	+	2892 )	/ 2 )
	=	116	/	2913
	=	3.98 %

(1) Note: The EBIT data used here is four times the quarterly (Jun. 2023) EBIT data.

TransAlta Renewables (TSX:RNW) 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.

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TransAlta Renewables (TSX:RNW) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Independent Power Producers » TransAlta Renewables Inc (TSX:RNW) » Definitions » ROCE %

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Address

110-12th Avenue South West, Calgary, AB, CAN, T2R 0G7

Website

http://www.transaltarenewables.com

TransAlta Renewables Inc is an electric utility company that owns and operates energy generation and transmission facilities. The operating business segments are Canadian Wind, Canadian Hydro, US Wind and Solar, Canadian Gas, US Gas, and Australian Gas. The company also has wind and solar facilities in Wyoming and Minnesota as well as the South Hedland Power Station and the Fortescue River Gas pipeline in Australia.