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China Yongda Automobiles Services Holdings (HKSE:03669) ROIC %

: 7.05% (As of Jun. 2022)
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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. China Yongda Automobiles Services Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was 7.05%.

As of today (2023-03-25), China Yongda Automobiles Services Holdings's WACC % is 6.68%. China Yongda Automobiles Services Holdings's ROIC % is 9.86% (calculated using TTM income statement data). China Yongda Automobiles Services Holdings 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.


China Yongda Automobiles Services Holdings ROIC % Historical Data

The historical data trend for China Yongda Automobiles Services Holdings's ROIC % 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.

China Yongda Automobiles Services Holdings Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 10.51 7.15 7.58 8.26 12.22

China Yongda Automobiles Services Holdings Semi-Annual Data
Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.66 11.07 11.25 12.43 7.05

Competitive Comparison

For the Auto & Truck Dealerships subindustry, China Yongda Automobiles Services Holdings's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

China Yongda Automobiles Services Holdings ROIC % Distribution

For the Vehicles & Parts industry and Consumer Cyclical sector, China Yongda Automobiles Services Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where China Yongda Automobiles Services Holdings's ROIC % falls in comparison to its industry or sector. The grey bar indicates the ROIC %'s extreme value range as defined by GuruFocus.



China Yongda Automobiles Services Holdings ROIC % Calculation

China Yongda Automobiles Services Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:

ROIC % (A: Dec. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2020 ) + Invested Capital (A: Dec. 2021 ))/ count )
=4559.8748424474 * ( 1 - 24.8% )/( (28640.75797541 + 27479.824805238)/ 2 )
=3429.0258815204/28060.291390324
=12.22 %

where

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))
=41178.957454605 - 7985.5381146147 - ( 4552.6613645803 - max(0, 19018.583036426 - 23951.360506155+4552.6613645803))
=28640.75797541

Invested Capital(A: Dec. 2021 )
=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))
=38652.318113764 - 8303.8785070573 - ( 2868.6148014695 - max(0, 16319.088832368 - 20347.35871854+2868.6148014695))
=27479.824805238

China Yongda Automobiles Services Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2022 is calculated as:

ROIC % (Q: Jun. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2021 ) + Invested Capital (Q: Jun. 2022 ))/ count )
=2482.7880245848 * ( 1 - 25.54% )/( (27479.824805238 + 24985.835097547)/ 2 )
=1848.6839631058/26232.829951393
=7.05 %

where

Invested Capital(Q: Dec. 2021 )
=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))
=38652.318113764 - 8303.8785070573 - ( 2868.6148014695 - max(0, 16319.088832368 - 20347.35871854+2868.6148014695))
=27479.824805238

Invested Capital(Q: 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))
=36029.662146612 - 7781.483988081 - ( 4330.5788136127 - max(0, 15104.535407635 - 18366.878468619+4330.5788136127))
=24985.835097547

Note: The Operating Income data used here is two times the semi-annual (Jun. 2022) 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.


China Yongda Automobiles Services Holdings  (HKSE:03669) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, China Yongda Automobiles Services Holdings's WACC % is 6.68%. China Yongda Automobiles Services Holdings's ROIC % is 9.86% (calculated using TTM income statement data). China Yongda Automobiles Services Holdings 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. China Yongda Automobiles Services 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 %, ROIC % 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.


China Yongda Automobiles Services Holdings ROIC % Related Terms

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China Yongda Automobiles Services Holdings (HKSE:03669) Business Description

China Yongda Automobiles Services Holdings logo
Traded in Other Exchanges
Address
299 Ruijin Nan Road, Huangpu District, Shanghai, CHN, 200023
China Yongda Automobiles Services Holdings is a Chinese company involved in automobile sales service, automobile finance, and automobile rental. The company has four segments: new passenger vehicle sales, repair and maintenance services, automobile extension products and services, automobile finance and insurance product agency services, pre-owned vehicles, automobile rental services, and financial leasing and small loan services. The auto sales service sells luxury automobiles like Bentley, BMW, Audi, Lincoln, Infiniti, Porsche, Jaguar Land Rover, AstonMartin, and Cadillac.

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