CLPS (CLPS) ROC % : -3.05% (As of Dec. 2023)

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What is CLPS 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 %. CLPS's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -3.05%.

As of today (2024-04-30), CLPS's WACC % is 4.91%. CLPS's ROC % is 0.29% (calculated using TTM income statement data). CLPS earns returns that do not match up to its cost of capital. It will destroy value as it grows.

CLPS ROC % Historical Data

The historical data trend for CLPS'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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CLPS ROC % Chart

CLPS Annual Data

Trend

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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-24.53

14.59

24.82

8.37

0.48

CLPS Semi-Annual Data
	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial											29.39	9.08	4.94	4.01	-3.05

CLPS ROC % Calculation

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

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	2.459 * ( 1 - 87.53% )	/	( (68.162	+	58.976)	/ 2 )
=	0.3066373	/	63.569
=	0.48 %

where

	Invested Capital		(A: Jun. 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	))
=	101.881	-	15.322	-	( 18.397	-	max(0, 30.383	-	76.76	+	18.397	))
=	68.162

	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	))
=	95.319	-	14.129	-	( 22.214	-	max(0, 26.314	-	72.874	+	22.214	))
=	58.976

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

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-1.216 * ( 1 - -41.94% )	/	( (58.976	+	54.374)	/ 2 )
=	-1.7259904	/	56.675
=	-3.05 %

where

	Invested Capital		(Q: 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	))
=	95.319	-	14.129	-	( 22.214	-	max(0, 26.314	-	72.874	+	22.214	))
=	58.976

	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	))
=	105.903	-	16.42	-	( 35.109	-	max(0, 34.54	-	78.037	+	35.109	))
=	54.374

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

CLPS (NAS:CLPS) 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, CLPS's WACC % is 4.91%. CLPS's ROC % is 0.29% (calculated using TTM income statement data). CLPS 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.

CLPS ROC % Related Terms

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CLPS (CLPS) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » CLPS Inc (NAS:CLPS) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

1UK:Germany

Address

c/o Unit 1000, 10th Floor, Millennium City III, 378 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong, HKG

Website

http://www.clpsglobal.com

CLPS Inc is a holding company. The company through its subsidiaries provides information technology consulting and solutions institutions in banking, insurance, and financial sectors, both in China and globally. Its products are Risk Control Platform, Transaction Acquiring Platform, Debt Collection Platform, Virtual Bank Training Platform, Credit Card System, and other related products. The company generates its revenue from IT consulting service, Customized IT solution service, and other. Generating majority of its revenue from the IT consulting service.