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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Kip McGrath Education Centres's annualized return on capital (ROC %) for the quarter that ended in Jun. 2026 was 9.23%.
As of today (2026-08-13), Kip McGrath Education Centres's WACC % is 9.42%. Kip McGrath Education Centres's ROC % is 12.04% (calculated using TTM income statement data).
Kip McGrath Education Centres 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.
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, Kip McGrath Education Centres's WACC % is 9.42%. Kip McGrath Education Centres's ROC % is 12.04% (calculated using TTM income statement data).
Kip McGrath Education Centres 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.
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.
Kip McGrath Education Centres ROC % Related Terms
Kip McGrath Education Centres ROC % Historical 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.
Note:
The Operating Income data used here is two times the semi-annual (Jun. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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.
Kip McGrath Education Centres (ASX:KME) has a ROC % of 9.23% as of Jun. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Kip McGrath Education Centres and its competitors.
Is Kip McGrath Education Centres' ROC % too high?
Kip McGrath Education Centres' current ROC % is 9.23%. The Education industry median ROC % is 5.36. Kip McGrath Education Centres' value of 9.23% is 72.2% above this industry median. Overall, Kip McGrath Education Centres has a GF Score™ of 62/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Kip McGrath Education Centres' ROC % compare to EDU and TAL?
Kip McGrath Education Centres' ROC % of 9.23% can be compared against companies in the Education industry. The industry median ROC % is 5.36. Kip McGrath Education Centres' value of 9.23% is 72.2% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for an Education company?
The median ROC % among Education companies is 5.36, based on 261 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Kip McGrath Education Centres's current ROC % of 9.23% is 72.2% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Kip McGrath Education Centres and its competitors. For the Education industry, the median ROC % is 5.36 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Kip McGrath Education Centres's current ROC % is 9.23%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Kip McGrath Education Centres stock overvalued right now?
Based on GuruFocus' analysis, Kip McGrath Education Centres (ASX:KME) is currently considered Significantly Overvalued. The stock's GF Value™ is A$0.52, compared to a current price of A$0.73 — trading 39.4% above its estimated fair value. The current ROC % is 9.23% and 72.2% above the Education industry median of 5.36. Kip McGrath Education Centres' overall GF Score™ is 62/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Kip McGrath Education Centres (ASX:KME), the current ROC % is 9.23% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Kip McGrath Education Centres (ASX:KME) Overvalued in 2026?
Based on GuruFocus' analysis, Kip McGrath Education Centres stock appears to be overvalued.
The current stock price of A$0.73 is trading 39.4% above its estimated GF Value™ of A$0.52.
GuruFocus considers Kip McGrath Education Centres to be Significantly Overvalued.
Key valuation signals for ASX:KME:
ROC %: 9.23%
GF Value™: A$0.52 vs. price of A$0.73 (39.4% above fair value)
Industry Position: 72.2% above the Education median
No single metric tells the full story. See the ASX:KME stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Kip McGrath Education Centres Ltd offers supplementary education to students through the franchise in Australia and overseas, in the United Kingdom and New Zealand. Its products are face-to-face tuition programs, direct at-home educational products, and online tertiary courses. Geographically, the company operates in Australasia, the United Kingdom and Europe, and Other overseas regions. It derives revenue from franchise fees, student lesson fees, sales of master territories and franchise centers, and direct sales, of which a majority of the revenue is derived from franchise fees.
62GF Score
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