Guzman y Gomez (ASX:GYG) ROC % : 2.50% (As of Jun. 2024)

View and export this data going back to 2024. Start your Free Trial

What is Guzman y Gomez 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 %. Guzman y Gomez's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 2.50%.

As of today (2024-12-14), Guzman y Gomez's WACC % is 9.76%. Guzman y Gomez's ROC % is -1.40% (calculated using TTM income statement data). Guzman y Gomez earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Guzman y Gomez ROC % Historical Data

The historical data trend for Guzman y Gomez'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.

* Premium members only.

Guzman y Gomez ROC % Chart

Guzman y Gomez Annual Data

Trend

Jun22

Jun23

Jun24

ROC %

-1.32

Guzman y Gomez Semi-Annual Data
	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	-	-	-	-19.63	2.50

Guzman y Gomez ROC % Calculation

Guzman y Gomez'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 )
=	-4.077 * ( 1 - -18.92% )	/	( (0	+	368.071)	/ 1 )
=	-4.8483684	/	368.071
=	-1.32 %

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	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

	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	))
=	661.797	-	39.387	-	( 294.48	-	max(0, 84.287	-	338.626	+	294.48	))
=	368.071

Guzman y Gomez'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 )
=	9.246 * ( 1 - 6.82% )	/	( (322.3	+	368.071)	/ 2 )
=	8.6154228	/	345.1855
=	2.50 %

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	))
=	603.8	-	22	-	( 279.7	-	max(0, 59.5	-	319	+	279.7	))
=	322.3

	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	))
=	661.797	-	39.387	-	( 294.48	-	max(0, 84.287	-	338.626	+	294.48	))
=	368.071

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

Guzman y Gomez (ASX:GYG) 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, Guzman y Gomez's WACC % is 9.76%. Guzman y Gomez's ROC % is -1.40% (calculated using TTM income statement data). Guzman y Gomez 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.

Guzman y Gomez ROC % Related Terms

Thank you for viewing the detailed overview of Guzman y Gomez's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Guzman y Gomez Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » Guzman y Gomez Ltd (ASX:GYG) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

126-130 Phillip Street, Level 5, Sydney, NSW, AUS

Website

https://www.guzmanygomez.com.au

Guzman y Gomez is a Mexican-inspired quick-service restaurant operator and franchisor. Most stores are in Australia. Underpinning the company's growth outlook is an ambitious plan to reach a network of more than 1000 Australian stores over the next 20-plus years. At the end of fiscal 2024, its footprint stood at a around 200. Guzman also has a nascent presence in Singapore and Japan through master franchise agreements and runs a handful of corporate-owned restaurants in the US.

Guzman y Gomez Headlines

No Headlines