Gumtree Australia Markets (ASX:GUM) ROC % : 6.92% (As of Dec. 2024)

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What is Gumtree Australia Markets 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 %. Gumtree Australia Markets's annualized return on capital (ROC %) for the quarter that ended in Dec. 2024 was 6.92%.

As of today (2025-03-16), Gumtree Australia Markets's WACC % is 10.85%. Gumtree Australia Markets's ROC % is -0.16% (calculated using TTM income statement data). Gumtree Australia Markets earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Gumtree Australia Markets ROC % Historical Data

The historical data trend for Gumtree Australia Markets'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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Gumtree Australia Markets ROC % Chart

Gumtree Australia Markets Annual Data

Trend

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

ROC %

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2.30

12.41

18.72

10.43

0.12

Gumtree Australia Markets Semi-Annual Data
	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24	Dec24
ROC %	Get a 7-Day Free Trial												6.04	7.39	3.58	-2.31	6.92

Gumtree Australia Markets ROC % Calculation

Gumtree Australia Markets'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 )
=	0.25 * ( 1 - 23.89% )	/	( (151.076	+	173.795)	/ 2 )
=	0.190275	/	162.4355
=	0.12 %

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	))
=	167.345	-	11.705	-	( 19.481	-	max(0, 32.206	-	36.77	+	19.481	))
=	151.076

	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	))
=	148.378	-	12.118	-	( 9.392	-	max(0, 61.586	-	24.051	+	9.392	))
=	173.795

Gumtree Australia Markets's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2024 is calculated as:

	ROC % (Q: Dec. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Dec. 2024 ))	/ count )
=	4.744 * ( 1 - -130.39% )	/	( (173.795	+	142.184)	/ 2 )
=	10.9297016	/	157.9895
=	6.92 %

where

	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	))
=	148.378	-	12.118	-	( 9.392	-	max(0, 61.586	-	24.051	+	9.392	))
=	173.795

	Invested Capital		(Q: Dec. 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	))
=	145.059	-	13.669	-	( 8.037	-	max(0, 30.764	-	19.97	+	8.037	))
=	142.184

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

Gumtree Australia Markets (ASX:GUM) 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, Gumtree Australia Markets's WACC % is 10.85%. Gumtree Australia Markets's ROC % is -0.16% (calculated using TTM income statement data). Gumtree Australia Markets 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.

Gumtree Australia Markets ROC % Related Terms

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Gumtree Australia Markets Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Interactive Media » Gumtree Australia Markets Ltd (ASX:GUM) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

28 The Esplanade, Level 6, BGC Centre, Perth, WA, AUS, 6000

Website

https://www.themarketlimited.com.au

Market Ltd Formerly The Market Herald Ltd is engaged in the provision of a stock market internet discussion forum, communications and investor relations, consultancy services, and a news platform. The company operating segments: Classifieds segment includes the operation of the Australian classified businesses, being Gumtree, Carsguide and Autotrader. The Capital Market segment consist of the digital community in Australia and Canada, being capital markets websites of The Market Online, HotCopper and Stockhouse. The Classifieds Segment Generates maximum revenue.

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