Ambo Agritec (BOM:543678) ROC % : 6.54% (As of Sep. 2023)

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What is Ambo Agritec 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 %. Ambo Agritec's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was 6.54%.

As of today (2024-05-26), Ambo Agritec's WACC % is 11.79%. Ambo Agritec's ROC % is 3.27% (calculated using TTM income statement data). Ambo Agritec earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Ambo Agritec ROC % Historical Data

The historical data trend for Ambo Agritec'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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Ambo Agritec ROC % Chart

Ambo Agritec Annual Data

Trend

Mar20

Mar21

Mar22

Mar23

ROC %

3.36

5.17

8.31

7.15

Ambo Agritec Semi-Annual Data
	Mar20	Mar21	Mar22	Mar23	Sep23
ROC %	-	-	-	-	6.54

Ambo Agritec ROC % Calculation

Ambo Agritec's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	25.256 * ( 1 - 24.4% )	/	( (209.564	+	324.601)	/ 2 )
=	19.093536	/	267.0825
=	7.15 %

where

	Invested Capital		(A: Mar. 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	))
=	255.375	-	43.749	-	( 2.062	-	max(0, 176.914	-	191.548	+	2.062	))
=	209.564

	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	))
=	390.411	-	62.798	-	( 3.012	-	max(0, 172.398	-	331.579	+	3.012	))
=	324.601

Ambo Agritec's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	28.746 * ( 1 - 25.16% )	/	( (324.601	+	332.847)	/ 2 )
=	21.5135064	/	328.724
=	6.54 %

where

	Invested Capital		(Q: 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	))
=	390.411	-	62.798	-	( 3.012	-	max(0, 172.398	-	331.579	+	3.012	))
=	324.601

	Invested Capital		(Q: Sep. 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	))
=	386.708	-	52.887	-	( 0.974	-	max(0, 166.96	-	327.796	+	0.974	))
=	332.847

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

Ambo Agritec (BOM:543678) 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, Ambo Agritec's WACC % is 11.79%. Ambo Agritec's ROC % is 3.27% (calculated using TTM income statement data). Ambo Agritec 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.

Ambo Agritec ROC % Related Terms

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Ambo Agritec (BOM:543678) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Ambo Agritec Ltd (BOM:543678) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

3, Pretoria Street, Chandrakunj Building, 2nd Floor, Kolkata, WB, IND, 700071

Website

https://www.amboagritec.com

Ambo Agritec Ltd is primarily engaged in the business of manufacturing biscuits, outsourced manufacturing of edible oils, vanaspati, and bengali speciality products. In addition to this, the company is also engaged in trading crude linseed oil, and soya bean meal.

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