Guangzhou Automobile Group Co (FRA:02G) ROC % : -2.58% (As of Mar. 2024)

View and export this data going back to 2010. Start your Free Trial

What is Guangzhou Automobile Group Co 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 %. Guangzhou Automobile Group Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -2.58%.

As of today (2024-05-20), Guangzhou Automobile Group Co's WACC % is 9.14%. Guangzhou Automobile Group Co's ROC % is -2.41% (calculated using TTM income statement data). Guangzhou Automobile Group Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Guangzhou Automobile Group Co ROC % Historical Data

The historical data trend for Guangzhou Automobile Group Co'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.

* Premium members only.

Guangzhou Automobile Group Co ROC % Chart

Guangzhou Automobile Group Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

Get a 7-Day Free Trial

-4.06

-3.87

-3.63

-2.77

-2.95

Guangzhou Automobile Group Co Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															-5.52	-4.52	-0.16	-3.27	-2.58

Guangzhou Automobile Group Co ROC % Calculation

Guangzhou Automobile Group Co'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 )
=	-498.372 * ( 1 - -6.11% )	/	( (16689.988	+	19172.332)	/ 2 )
=	-528.8225292	/	17931.16
=	-2.95 %

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	))
=	25704.067	-	4275.336	-	( 5923.157	-	max(0, 7664.727	-	12403.47	+	5923.157	))
=	16689.988

	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	))
=	28047.951	-	5795.447	-	( 6637.913	-	max(0, 9905.242	-	12985.414	+	6637.913	))
=	19172.332

Guangzhou Automobile Group Co's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-445.428 * ( 1 - -12.63% )	/	( (19172.332	+	19763.726)	/ 2 )
=	-501.6855564	/	19468.029
=	-2.58 %

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	))
=	28047.951	-	5795.447	-	( 6637.913	-	max(0, 9905.242	-	12985.414	+	6637.913	))
=	19172.332

	Invested Capital		(Q: Mar. 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	))
=	27142.173	-	4390.101	-	( 5386.224	-	max(0, 8751.383	-	11739.729	+	5386.224	))
=	19763.726

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

Guangzhou Automobile Group Co (FRA:02G) 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, Guangzhou Automobile Group Co's WACC % is 9.14%. Guangzhou Automobile Group Co's ROC % is -2.41% (calculated using TTM income statement data). Guangzhou Automobile Group Co 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.

Guangzhou Automobile Group Co ROC % Related Terms

Thank you for viewing the detailed overview of Guangzhou Automobile Group Co's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Guangzhou Automobile Group Co (FRA:02G) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Guangzhou Automobile Group Co Ltd (FRA:02G) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

GNZUF:USA 02238:Hong Kong 02G:Germany 601238:China

Address

18 Whitfield Road, Room 808, Citicorp Centre, Causeway Bay, Hong Kong, HKG

Website

https://www.gac.com.cn

Guangzhou Automobile Group Co Ltd is a state-controlled producer of passenger vehicles, motorcycles, and auto parts. The company's activities are broadly classified into two segments; The vehicles and related operations segment include the production and sale of a variety of passenger vehicles, commercial vehicles, automotive parts, and related operations, and the Others segment includes mainly the production and sale of motorcycles, automobile finance, and insurance, other financing services, and investing businesses. The firm's operations are spread across Mainland China and Hong Kong. Its vehicles segment generates a majority of the revenues for the company. Geographically, it derives a majority of its revenue from Mainland China.

Guangzhou Automobile Group Co (FRA:02G) Headlines

No Headlines