Empire Industries (BOM:509525) ROC % : 8.22% (As of Sep. 2024)

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What is Empire Industries 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 %. Empire Industries's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 8.22%.

As of today (2024-12-12), Empire Industries's WACC % is 8.90%. Empire Industries's ROC % is 6.76% (calculated using TTM income statement data). Empire Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Empire Industries ROC % Historical Data

The historical data trend for Empire Industries'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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Empire Industries ROC % Chart

Empire Industries Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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7.95

3.78

6.41

8.30

6.28

Empire Industries Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															7.77	1.51	9.99	7.36	8.22

Empire Industries ROC % Calculation

Empire Industries's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	476.717 * ( 1 - 18.97% )	/	( (6133.413	+	6159.455)	/ 2 )
=	386.2837851	/	6146.434
=	6.28 %

where

	Invested Capital		(A: Mar. 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	))
=	7396.593	-	584.762	-	( 678.418	-	max(0, 2194.183	-	3977.601	+	678.418	))
=	6133.413

	Invested Capital		(A: Mar. 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	))
=	7270.669	-	298.253	-	( 812.961	-	max(0, 2502.196	-	3672.993	+	812.961	))
=	6159.455

Empire Industries's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	605.644 * ( 1 - 13.27% )	/	( (0	+	6389.975)	/ 1 )
=	525.2750412	/	6389.975
=	8.22 %

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

	Invested Capital		(Q: Sep. 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	))
=	7952.255	-	344.785	-	( 1217.495	-	max(0, 2835.73	-	4198.364	+	1217.495	))
=	6389.975

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

Empire Industries (BOM:509525) 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, Empire Industries's WACC % is 8.90%. Empire Industries's ROC % is 6.76% (calculated using TTM income statement data). Empire Industries 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.

Empire Industries ROC % Related Terms

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Empire Industries Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Conglomerates » Empire Industries Ltd (BOM:509525) » Definitions » ROC %

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Traded in Other Exchanges

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Address

414, Senapati Bapat Marg, Empire Complex, Lower Parel, Mumbai, MH, IND, 400 013

Website

https://www.empiremumbai.com

Empire Industries Ltd is a multi-divisional company engaged in different businesses. Its segments are Manufacturing - comprising of manufacturing glass bottles; Trading, Business Support Services, Consultancy, Commission; and Property development. The company derives revenue primarily from the business of manufacturing of container glass, trading in frozen foods, indenting and real estate. It also imports frozen foods from the global market and distributes them to hotels, provides office space on a leave and license basis to companies and banks, develops residential, and provides workspace solutions to clients. The company operates in India and internationally.

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