CLEGF (Coles Group) ROC % : 6.86% (As of Jun. 2024)

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What is Coles 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 %. Coles Group's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 6.86%.

As of today (2024-12-13), Coles Group's WACC % is 5.97%. Coles Group's ROC % is 7.55% (calculated using TTM income statement data). Coles Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Coles Group ROC % Historical Data

The historical data trend for Coles 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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Coles Group ROC % Chart

Coles Group Annual Data

Trend

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

ROC %

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10.07

7.72

5.58

6.56

7.44

Coles Group Semi-Annual Data
	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial							5.43	8.08	5.14	8.29	6.86

Coles Group ROC % Calculation

Coles Group'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 )
=	1229.748 * ( 1 - 30.15% )	/	( (11083.221	+	11999.336)	/ 2 )
=	858.978978	/	11541.2785
=	7.44 %

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	))
=	12276.51	-	2975.839	-	( 400.671	-	max(0, 4300.671	-	2518.121	+	400.671	))
=	11083.221

	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	))
=	13193.891	-	3043.825	-	( 448.207	-	max(0, 4496.016	-	2646.746	+	448.207	))
=	11999.336

Coles 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 )
=	1142.098 * ( 1 - 30.1% )	/	( (11267.739	+	11999.336)	/ 2 )
=	798.326502	/	11633.5375
=	6.86 %

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	))
=	13042.169	-	3360.107	-	( 730.924	-	max(0, 4718.876	-	3133.199	+	730.924	))
=	11267.739

	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	))
=	13193.891	-	3043.825	-	( 448.207	-	max(0, 4496.016	-	2646.746	+	448.207	))
=	11999.336

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

Coles Group (OTCPK:CLEGF) 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, Coles Group's WACC % is 5.97%. Coles Group's ROC % is 7.55% (calculated using TTM income statement data). Coles Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

Coles Group ROC % Related Terms

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Coles Group Business Description

Industry

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2OF:Germany COL:Australia

Address

800-838 Toorak Road, Hawthorn East, Melbourne, VIC, AUS, 3123

Website

https://www.colesgroup.com.au

Coles is one of Australia's largest retailers, operating the second-largest supermarket chain behind market leader Woolworths, and is the country's third-largest liquor retailer. The group has an extensive store network of over 1,800 stores and roughly 80% of Australian live within a 10-minute drive from a Coles store. The retailer employs some 120,000 people, who process 17 million individual customer transactions a week. This compares with Woolworths serving about 30 million customers per week from Australia's population of 25 million.