Changming Industrial Management Group Holding (Changming Industrial Management Group Holding) ROC % : -15.75% (As of Jun. 2009)

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What is Changming Industrial Management Group Holding 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 %. Changming Industrial Management Group Holding's annualized return on capital (ROC %) for the quarter that ended in Jun. 2009 was -15.75%.

As of today (2024-06-23), Changming Industrial Management Group Holding's WACC % is 0.00%. Changming Industrial Management Group Holding's ROC % is 0.00% (calculated using TTM income statement data). Changming Industrial Management Group Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Changming Industrial Management Group Holding ROC % Historical Data

The historical data trend for Changming Industrial Management Group Holding'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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Changming Industrial Management Group Holding ROC % Chart

Changming Industrial Management Group Holding Annual Data

Trend

May07

May08

ROC %

-133.33

Changming Industrial Management Group Holding Quarterly Data
	Nov06	Feb07	May07	Aug07	Nov07	Feb08	May08	Sep08	Dec08	Mar09	Jun09
ROC %	Get a 7-Day Free Trial						-213.33	-	-37.28	-114.86	-15.75

Changming Industrial Management Group Holding ROC % Calculation

Changming Industrial Management Group Holding's annualized Return on Capital (ROC %) for the fiscal year that ended in May. 2008 is calculated as:

	ROC % (A: May. 2008 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: May. 2007 )	+	Invested Capital (A: May. 2008 ))	/ count )
=	-0.02 * ( 1 - 0% )	/	( (0	+	0.015)	/ 1 )
=	-0.02	/	0.015
=	-133.33 %

where

	Invested Capital		(A: May. 2007 )
=	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	))
=	0.003	-	0.003	-	( 0.003	-	max(0, 0.003	-	0.003	+	0.003	))
=	0

	Invested Capital		(A: May. 2008 )
=	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	))
=	0	-	0.003	-	( 0	-	max(0, 0.018	-	0	+	0	))
=	0.015

Changming Industrial Management Group Holding's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2009 is calculated as:

	ROC % (Q: Jun. 2009 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2009 )	+	Invested Capital (Q: Jun. 2009 ))	/ count )
=	-0.384 * ( 1 - 0% )	/	( (2.37	+	2.507)	/ 2 )
=	-0.384	/	2.4385
=	-15.75 %

where

	Invested Capital		(Q: Mar. 2009 )
=	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	))
=	1.068	-	4.495	-	( 0.04	-	max(0, 6.002	-	0.205	+	0.04	))
=	2.37

	Invested Capital		(Q: Jun. 2009 )
=	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	))
=	1.478	-	4.538	-	( 0.027	-	max(0, 6.041	-	0.474	+	0.027	))
=	2.507

Note: The Operating Income data used here is four times the quarterly (Jun. 2009) data.

Changming Industrial Management Group Holding (OTCPK:CMIM) 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, Changming Industrial Management Group Holding's WACC % is 0.00%. Changming Industrial Management Group Holding's ROC % is 0.00% (calculated using TTM income statement data). Changming Industrial Management Group Holding 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.

Changming Industrial Management Group Holding ROC % Related Terms

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Changming Industrial Management Group Holding (Changming Industrial Management Group Holding) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Changming Industrial Management Group Holding Inc (OTCPK:CMIM) » Definitions » ROC %

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Traded in Other Exchanges

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Address

Room 904, Tung Wai Commercial Building, Wan Chai, Hong Kong, HKG

Website

http://www.sxcmky.com

Changming Industrial Management Group Holding Inc is engaged in the processing and sales of mineral products as well as vanadium mining. Its product series include Product Series Vanadium ore, crystal, pentoxide, alloy, iron, and titanium alloy.

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