GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Education » Wisdom Education International Holdings Co Ltd (FRA:5Q4) » Definitions » ROC %

Wisdom Education International Holdings Co (FRA:5Q4) ROC % : 9.02% (As of Aug. 2024)


View and export this data going back to 2020. Start your Free Trial

What is Wisdom Education International Holdings 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 %. Wisdom Education International Holdings Co's annualized return on capital (ROC %) for the quarter that ended in Aug. 2024 was 9.02%.

As of today (2025-03-17), Wisdom Education International Holdings Co's WACC % is 7.05%. Wisdom Education International Holdings Co's ROC % is 10.08% (calculated using TTM income statement data). Wisdom Education International Holdings Co 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.


Wisdom Education International Holdings Co ROC % Historical Data

The historical data trend for Wisdom Education International Holdings 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.

Wisdom Education International Holdings Co ROC % Chart

Wisdom Education International Holdings Co Annual Data
Trend Aug15 Aug16 Aug17 Aug18 Aug19 Aug20 Aug21 Aug22 Aug23 Aug24
ROC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 7.28 19.45 14.54 18.36 9.70

Wisdom Education International Holdings Co Semi-Annual Data
Aug14 Aug15 Feb16 Aug16 Feb17 Aug17 Feb18 Aug18 Feb19 Aug19 Feb20 Aug20 Feb21 Aug21 Feb22 Aug22 Feb23 Aug23 Feb24 Aug24
ROC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 11.25 15.27 28.23 11.49 9.02

Wisdom Education International Holdings Co ROC % Calculation

Wisdom Education International Holdings Co's annualized Return on Capital (ROC %) for the fiscal year that ended in Aug. 2024 is calculated as:

ROC % (A: Aug. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Aug. 2023 ) + Invested Capital (A: Aug. 2024 ))/ count )
=13.541 * ( 1 - 12.94% )/( (112.761 + 130.289)/ 2 )
=11.7887946/121.525
=9.70 %

where

Wisdom Education International Holdings Co's annualized Return on Capital (ROC %) for the quarter that ended in Aug. 2024 is calculated as:

ROC % (Q: Aug. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Feb. 2024 ) + Invested Capital (Q: Aug. 2024 ))/ count )
=11.744 * ( 1 - 7.71% )/( (110.105 + 130.289)/ 2 )
=10.8385376/120.197
=9.02 %

where

Invested Capital(Q: Feb. 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))
=178.468 - 39.735 - ( 28.628 - max(0, 107.444 - 137.712+28.628))
=110.105

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

* 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.


Wisdom Education International Holdings Co  (FRA:5Q4) 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, Wisdom Education International Holdings Co's WACC % is 7.05%. Wisdom Education International Holdings Co's ROC % is 10.08% (calculated using TTM income statement data). Wisdom Education International Holdings Co 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.


Wisdom Education International Holdings Co ROC % Related Terms

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


Wisdom Education International Holdings Co Business Description

Traded in Other Exchanges
Address
No. 68 Guangming Da Dao, Dongcheng District, Dongguan, CHN
Wisdom Education International Holdings Co Ltd is a private education group operating premium primary and secondary schools in China. Its service line includes School-related supply chain business and comprehensive educational services out of which it generates the majority of its revenue from the School-related supply chain business. Geographically it generates key revenue from the Mainland, PRC.

Wisdom Education International Holdings Co Headlines

No Headlines