Wotif.com Holdings (ASX:WTF) ROC % : 30.87% (As of Jun. 2014)

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What is Wotif.com Holdings 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 %. Wotif.com Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2014 was 30.87%.

As of today (2024-05-17), Wotif.com Holdings's WACC % is 2.11%. Wotif.com Holdings's ROC % is 0.00% (calculated using TTM income statement data). Wotif.com Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Wotif.com Holdings ROC % Historical Data

The historical data trend for Wotif.com Holdings'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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Wotif.com Holdings ROC % Chart

Wotif.com Holdings Annual Data

Trend

Jun06

Jun07

Jun08

Jun09

Jun10

Jun11

Jun12

Jun13

Jun14

ROC %

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40.94

36.93

40.85

34.62

30.00

Wotif.com Holdings Semi-Annual Data
	Dec05	Jun06	Dec06	Jun07	Dec07	Jun08	Dec08	Jun09	Dec09	Jun10	Dec10	Jun11	Dec11	Jun12	Dec12	Jun13	Dec13	Jun14
ROC %	Get a 7-Day Free Trial													42.06	39.01	33.09	31.89	30.87

Wotif.com Holdings ROC % Calculation

Wotif.com Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2014 is calculated as:

	ROC % (A: Jun. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2013 )	+	Invested Capital (A: Jun. 2014 ))	/ count )
=	60.375 * ( 1 - 32.55% )	/	( (140.638	+	130.881)	/ 2 )
=	40.7229375	/	135.7595
=	30.00 %

where

	Invested Capital		(A: Jun. 2013 )
=	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	))
=	267.082	-	147.993	-	( 132	-	max(0, 164.4	-	142.851	+	132	))
=	140.638

	Invested Capital		(A: Jun. 2014 )
=	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	))
=	222.983	-	116.572	-	( 91.082	-	max(0, 123.975	-	99.505	+	91.082	))
=	130.881

Wotif.com Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2014 is calculated as:

	ROC % (Q: Jun. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2013 )	+	Invested Capital (Q: Jun. 2014 ))	/ count )
=	60.232 * ( 1 - 34.79% )	/	( (123.612	+	130.881)	/ 2 )
=	39.2772872	/	127.2465
=	30.87 %

where

	Invested Capital		(Q: Dec. 2013 )
=	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	))
=	241.166	-	136.749	-	( 114.622	-	max(0, 139.705	-	120.51	+	114.622	))
=	123.612

	Invested Capital		(Q: Jun. 2014 )
=	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	))
=	222.983	-	116.572	-	( 91.082	-	max(0, 123.975	-	99.505	+	91.082	))
=	130.881

Note: The Operating Income data used here is two times the semi-annual (Jun. 2014) data.

Wotif.com Holdings (ASX:WTF) 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, Wotif.com Holdings's WACC % is 2.11%. Wotif.com Holdings's ROC % is 0.00% (calculated using TTM income statement data). Wotif.com Holdings 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.

Wotif.com Holdings ROC % Related Terms

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Wotif.com Holdings (ASX:WTF) Business Description

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Website

http://www.wotif.com

Wotif.com Holdings Limited is a provider of online accommodation, activity and flight booking services in Australasia. The company represents over 19,600+ properties in more than 66 countries with its headquarters in Australia and offices in New Zealand, UK, Singapore, Thailand, Malaysia and Canada.

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