Fortune Valley Treasures (Fortune Valley Treasures) ROIC % : -163.34% (As of Dec. 2023)

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What is Fortune Valley Treasures ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Fortune Valley Treasures's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -163.34%.

As of today (2024-04-25), Fortune Valley Treasures's WACC % is 3.92%. Fortune Valley Treasures's ROIC % is -58.11% (calculated using TTM income statement data). Fortune Valley Treasures earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Fortune Valley Treasures ROIC % Historical Data

The historical data trend for Fortune Valley Treasures'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.

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Fortune Valley Treasures ROIC % Chart

Fortune Valley Treasures Annual Data

Trend

Aug15

Aug16

Aug17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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-535.21

63.78

20.65

-1.30

-66.66

Fortune Valley Treasures Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROIC %	Get a 7-Day Free Trial															-93.30	-2.32	-23.23	-73.51	-163.34

Competitive Comparison of Fortune Valley Treasures's ROIC %

For the Beverages - Wineries & Distilleries subindustry, Fortune Valley Treasures'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.

Fortune Valley Treasures's ROIC % Distribution in the Beverages - Alcoholic Industry

For the Beverages - Alcoholic industry and Consumer Defensive sector, Fortune Valley Treasures's ROIC % distribution charts can be found below:

* The bar in red indicates where Fortune Valley Treasures's ROIC % falls into.

Fortune Valley Treasures ROIC % Calculation

Fortune Valley Treasures's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-3.712 * ( 1 - -2.3% )	/	( (7.326	+	4.068)	/ 2 )
=	-3.797376	/	5.697
=	-66.66 %

where

	Invested Capital		(A: 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	))
=	9.288	-	1.796	-	( 0.166	-	max(0, 2.485	-	6.871	+	0.166	))
=	7.326

	Invested Capital		(A: 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	))
=	6.249	-	1.893	-	( 0.288	-	max(0, 3.852	-	5.083	+	0.288	))
=	4.068

Fortune Valley Treasures's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-8.252 * ( 1 - -0.08% )	/	( (6.044	+	4.068)	/ 2 )
=	-8.2586016	/	5.056
=	-163.34 %

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	))
=	7.374	-	1.317	-	( 0.013	-	max(0, 2.672	-	5.743	+	0.013	))
=	6.044

	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	))
=	6.249	-	1.893	-	( 0.288	-	max(0, 3.852	-	5.083	+	0.288	))
=	4.068

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

Fortune Valley Treasures (OTCPK:FVTI) 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, Fortune Valley Treasures's WACC % is 3.92%. Fortune Valley Treasures's ROIC % is -58.11% (calculated using TTM income statement data).

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.

Fortune Valley Treasures ROIC % Related Terms

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Fortune Valley Treasures (Fortune Valley Treasures) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Beverages - Alcoholic » Fortune Valley Treasures Inc (OTCPK:FVTI) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 139 Liansheng Road, B1601 Oriental Impression Building 2, Humen Town, Dongguan, Guangdong, CHN, 523900

Website

http://www.fvti.show

Fortune Valley Treasures Inc is engaged in operations of wholesale distribution and retail sales of food and beverage products in the People's Republic of China. The company is into acquiring businesses that are in the food, beverage, and alcohol industries. Its products include a variety of wines, such as dry red wine, dry white wine, rose wine, and sweet wine, and other products. Its products are sold to retailers, such as wine shops, convenience stores, and supermarkets.

Executives

Kaihong Lin	director, officer: CFO, Treasurer, Director	NO. 10 OF TUANJIE 2ND ROAD, BEICE, HUMEN, DONGGUAN, GUANGDONG F4 518000
Xinlong Shen	director, officer: CEO, CFO	19F, LIANHE TOWER, 1069 NANHAI AVE,, NANSHAN DISTRICT, SHENZHEN F4 518000

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