CMGMY (Chemring Group) ROC % : 5.79% (As of Apr. 2024)

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What is Chemring 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 %. Chemring Group's annualized return on capital (ROC %) for the quarter that ended in Apr. 2024 was 5.79%.

As of today (2024-12-16), Chemring Group's WACC % is 12.04%. Chemring Group's ROC % is 6.74% (calculated using TTM income statement data). Chemring Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Chemring Group ROC % Historical Data

The historical data trend for Chemring 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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Chemring Group ROC % Chart

Chemring Group Annual Data

Trend

Oct14

Oct15

Oct16

Oct17

Oct18

Oct19

Oct20

Oct21

Oct22

Oct23

ROC %

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5.51

8.04

9.43

8.28

7.53

Chemring Group Semi-Annual Data
	Oct14	Apr15	Oct15	Apr16	Oct16	Apr17	Oct17	Apr18	Oct18	Apr19	Oct19	Apr20	Oct20	Apr21	Oct21	Apr22	Oct22	Apr23	Oct23	Apr24
ROC %	Get a 7-Day Free Trial															11.24	7.08	7.94	7.41	5.79

Chemring Group ROC % Calculation

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

	ROC % (A: Oct. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Oct. 2022 )	+	Invested Capital (A: Oct. 2023 ))	/ count )
=	55.298 * ( 1 - 14.51% )	/	( (614.852	+	641.048)	/ 2 )
=	47.2742602	/	627.95
=	7.53 %

where

	Invested Capital		(A: Oct. 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	))
=	703.061	-	65.76	-	( 22.449	-	max(0, 128.912	-	205.442	+	22.449	))
=	614.852

	Invested Capital		(A: Oct. 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	))
=	726.431	-	77.588	-	( 7.795	-	max(0, 173.082	-	223.752	+	7.795	))
=	641.048

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

	ROC % (Q: Apr. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Oct. 2023 )	+	Invested Capital (Q: Apr. 2024 ))	/ count )
=	43.804 * ( 1 - 19.74% )	/	( (641.048	+	573.718)	/ 2 )
=	35.1570904	/	607.383
=	5.79 %

where

	Invested Capital		(Q: Oct. 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	))
=	726.431	-	77.588	-	( 7.795	-	max(0, 173.082	-	223.752	+	7.795	))
=	641.048

	Invested Capital		(Q: Apr. 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	))
=	770.213	-	190.738	-	( 5.757	-	max(0, 218.023	-	277.597	+	5.757	))
=	573.718

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

Chemring Group (OTCPK:CMGMY) 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, Chemring Group's WACC % is 12.04%. Chemring Group's ROC % is 6.74% (calculated using TTM income statement data). Chemring 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.

Chemring Group ROC % Related Terms

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Chemring Group Business Description

Industry

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CMGMF:USA CHGl:UK CHG:UK CMN1:Germany

Address

Old Salisbury Lane, Roke Manor, Romsey, Hampshire, GBR, SO51 0ZN

Website

http://www.chemring.co.uk

Chemring Group PLC is a defense technology company. The company's operating segment includes Sensors and Information; it is engaged in the development and manufacturing of electronic countermeasures, chemical and biological threat detection equipment, and explosive hazard detection (EHD) equipment. and Countermeasures and Energetics segment is engaged in the development and manufacturing of expendable countermeasures for air and sea platforms, cartridge/propellant actuated devices, pyrotechnic devices for satellite launch and deployment, missile components, propellants, separation sub-systems, actuators, and energetic materials. It generates maximum revenue from the Countermeasures and Energetics segment. Geographically, the majority of the revenue for the company is generated from UK.