Johns Lyng Group (ASX:JLG) ROC % : 11.53% (As of Dec. 2023)

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What is Johns Lyng 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 %. Johns Lyng Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 11.53%.

As of today (2024-05-01), Johns Lyng Group's WACC % is 12.08%. Johns Lyng Group's ROC % is 11.55% (calculated using TTM income statement data). Johns Lyng Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Johns Lyng Group ROC % Historical Data

The historical data trend for Johns Lyng 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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Johns Lyng Group ROC % Chart

Johns Lyng Group Annual Data

Trend

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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27.83

24.53

21.35

13.77

13.36

Johns Lyng Group Semi-Annual Data
	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial								15.26	9.89	15.48	11.52	11.53

Johns Lyng Group ROC % Calculation

Johns Lyng Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	91.496 * ( 1 - 32.78% )	/	( (415.594	+	504.862)	/ 2 )
=	61.5036112	/	460.228
=	13.36 %

where

	Invested Capital		(A: 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	))
=	649.885	-	192.081	-	( 56.972	-	max(0, 277.631	-	319.841	+	56.972	))
=	415.594

	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	))
=	785.482	-	200.581	-	( 130.034	-	max(0, 319.579	-	399.618	+	130.034	))
=	504.862

Johns Lyng Group's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	88.89 * ( 1 - 32.3% )	/	( (504.862	+	538.595)	/ 2 )
=	60.17853	/	521.7285
=	11.53 %

where

	Invested Capital		(Q: 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	))
=	785.482	-	200.581	-	( 130.034	-	max(0, 319.579	-	399.618	+	130.034	))
=	504.862

	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	))
=	800.228	-	178.85	-	( 109.03	-	max(0, 272.431	-	355.214	+	109.03	))
=	538.595

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Johns Lyng Group (ASX:JLG) 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, Johns Lyng Group's WACC % is 12.08%. Johns Lyng Group's ROC % is 11.55% (calculated using TTM income statement data). Johns Lyng 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.

Johns Lyng Group ROC % Related Terms

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Johns Lyng Group (ASX:JLG) Business Description

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GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Johns Lyng Group Ltd (ASX:JLG) » Definitions » ROC %

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JLGRF:USA

Address

1 Williamsons Road, Doncastor, Melbourne, VIC, AUS, 3108

Website

https://www.johnslyng.com.au

Johns Lyng Group Ltd provides integrated building services in Australia. The company's operating segment include Insurance Building and Restoration Services; Commercial Building Services; Commercial Construction - Commercial Builders and Others. It generates maximum revenue from the Insurance Building and Restoration Services segment. Building and Restoration Services segment is involved in the building fabric repair, contents restoration and hazardous waste removal. The Commercial Building Services segment focuses on residential and commercial flooring, emergency domestic repairs, shop-fitting, and commercial glazing. Geographically the company generates the majority of its revenue from Australia and New Zealand.

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