BRDNF (Breedon Group) ROC % : 11.36% (As of Jun. 2024)

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What is Breedon Group 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 %. Breedon Group's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 11.36%.

As of today (2024-12-14), Breedon Group's WACC % is 11.24%. Breedon Group's ROC % is 7.06% (calculated using TTM income statement data). Breedon Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Breedon Group ROC % Historical Data

The historical data trend for Breedon Group'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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Breedon Group ROC % Chart

Breedon Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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7.76

3.78

6.27

8.47

8.06

Breedon Group Quarterly Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															14.67	19.69	14.26	17.54	11.36

Breedon Group ROC % Calculation

Breedon Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	185.063 * ( 1 - 21.43% )	/	( (1731.303	+	1876.709)	/ 2 )
=	145.4039991	/	1804.006
=	8.06 %

where

	Invested Capital		(A: Dec. 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	))
=	2175.152	-	319.976	-	( 123.873	-	max(0, 346.772	-	505.603	+	123.873	))
=	1731.303

	Invested Capital		(A: Dec. 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	))
=	2370.633	-	333.291	-	( 160.633	-	max(0, 374.177	-	601.139	+	160.633	))
=	1876.709

Breedon Group's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	321.12 * ( 1 - 26.67% )	/	( (1876.709	+	2268.575)	/ 2 )
=	235.477296	/	2072.642
=	11.36 %

where

	Invested Capital		(Q: Dec. 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	))
=	2370.633	-	333.291	-	( 160.633	-	max(0, 374.177	-	601.139	+	160.633	))
=	1876.709

	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	))
=	2727.863	-	420.738	-	( 38.55	-	max(0, 444.275	-	638.041	+	38.55	))
=	2268.575

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

Breedon Group (OTCPK:BRDNF) 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, Breedon Group's WACC % is 11.24%. Breedon Group's ROC % is 7.06% (calculated using TTM income statement data). Breedon Group 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.

Breedon Group ROC % Related Terms

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Breedon Group Business Description

Industry

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BREEl:UK BREE:UK

Address

Main Street, Breedon on the Hill, Pinnacle House, Breedon Quarry, Derby, ENG, DE73 8AP

Website

https://www.breedongroup.com

Breedon Group PLC is a producer of construction materials. The products include aggregates such as polished stone value stones, sub-base materials and sands for the road construction industry, milled limestones for agricultural applications, asphalt, ready-mix concrete, concrete beams and blocks, and cement. The company also offers surfacing and contracting services, which lays asphalt and other bituminous bound materials. Breedon's customers range from civil engineering businesses over local authorities and utilities companies to homes and smaller businesses. The company generates majority of its revenue in the United Kingdom.