APA Group (ASX:APA) ROC % : -5.32% (As of Jun. 2024)

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What is APA Group ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. APA Group's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -5.32%.

As of today (2024-12-15), APA Group's WACC % is 6.40%. APA Group's ROC % is 4.64% (calculated using TTM income statement data). APA Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

APA Group ROC % Historical Data

The historical data trend for APA Group'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.

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APA Group ROC % Chart

APA Group Annual Data

Trend

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

ROC %

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3.97

-9.99

3.72

3.50

4.74

APA Group Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															3.39	4.08	2.84	15.18	-5.32

APA Group ROC % Calculation

APA Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2024 is calculated as:

	ROC % (A: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2023 )	+	Invested Capital (A: Jun. 2024 ))	/ count )
=	915 * ( 1 - 6.99% )	/	( (15430	+	20485)	/ 2 )
=	851.0415	/	17957.5
=	4.74 %

where

	Invested Capital		(A: Jun. 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	))
=	15866	-	471	-	( 513	-	max(0, 1068	-	1033	+	513	))
=	15430

	Invested Capital		(A: Jun. 2024 )
=	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	))
=	19563	-	555	-	( 676	-	max(0, 2864	-	1387	+	676	))
=	20485

APA Group's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-970 * ( 1 - -8.51% )	/	( (19113	+	20485)	/ 2 )
=	-1052.547	/	19799
=	-5.32 %

where

	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	))
=	20032	-	497	-	( 1339	-	max(0, 1550	-	1972	+	1339	))
=	19113

	Invested Capital		(Q: Jun. 2024 )
=	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	))
=	19563	-	555	-	( 676	-	max(0, 2864	-	1387	+	676	))
=	20485

Note: The Operating Income data used here is two times the semi-annual (Jun. 2024) data.

APA Group (ASX:APA) 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, APA Group's WACC % is 6.40%. APA Group's ROC % is 4.64% (calculated using TTM income statement data). APA Group 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 %, 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.

APA Group ROC % Related Terms

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APA Group Business Description

Industry

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Comparable Companies

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APAJF:USA PJZ:Germany

Address

580 George Street, Level 25, Sydney, NSW, AUS, 2000

Website

https://www.apa.com.au

APA Group is Australia's largest gas infrastructure company with an extensive portfolio of transmission pipelines, distribution networks, and storage facilities, and is increasingly investing in renewable energy generation, electricity transmission, and batteries. It is internally managed and has direct operational control over all assets. It owns minority stakes in a few smaller gas infrastructure companies and manages operations for most of these. The stapled securities comprise a unit in Australian Pipeline Trust and in APT Investment Trust.