ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. TOWA Pharmaceutical Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 3.56%.
As of today (2026-06-28), TOWA Pharmaceutical Co's WACC % is 1.72%. TOWA Pharmaceutical Co's ROC % is 2.30% (calculated using TTM income statement data).
TOWA Pharmaceutical 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.
TOWA Pharmaceutical Co (FRA:6QC) 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, TOWA Pharmaceutical Co's WACC % is 1.72%. TOWA Pharmaceutical Co's ROC % is 2.30% (calculated using TTM income statement data).
TOWA Pharmaceutical 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.
* 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.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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.
TOWA Pharmaceutical Co (FRA:6QC) has a ROC % of 3.56% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on TOWA Pharmaceutical Co and its competitors.
Is TOWA Pharmaceutical Co's ROC % too high?
TOWA Pharmaceutical Co's current ROC % is 3.56%. The Drug Manufacturers industry median ROC % is 4.46. TOWA Pharmaceutical Co's value of 3.56% is 20.2% below this industry median. Overall, TOWA Pharmaceutical Co has a GF Score™ of 88/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does TOWA Pharmaceutical Co's ROC % compare to ZTS?
TOWA Pharmaceutical Co's ROC % of 3.56% can be compared against companies in the Drug Manufacturers industry. The industry median ROC % is 4.46. TOWA Pharmaceutical Co's value of 3.56% is 20.2% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Drug Manufacturers company?
The median ROC % among Drug Manufacturers companies is 4.46, based on 982 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. TOWA Pharmaceutical Co's current ROC % of 3.56% is 20.2% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on TOWA Pharmaceutical Co and its competitors. For the Drug Manufacturers industry, the median ROC % is 4.46 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. TOWA Pharmaceutical Co's current ROC % is 3.56%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is TOWA Pharmaceutical Co stock overvalued right now?
Based on GuruFocus' analysis, TOWA Pharmaceutical Co (FRA:6QC) is currently considered Fairly Valued. The stock's GF Value™ is €17.54, compared to a current price of €19.60 — trading 11.7% above its estimated fair value. The current ROC % is 3.56% and 20.2% below the Drug Manufacturers industry median of 4.46. TOWA Pharmaceutical Co's overall GF Score™ is 88/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For TOWA Pharmaceutical Co (FRA:6QC), the current ROC % is 3.56% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is TOWA Pharmaceutical Co (FRA:6QC) Overvalued in 2026?
Based on GuruFocus' analysis, TOWA Pharmaceutical Co stock appears to be overvalued.
The current stock price of €19.60 is trading 11.7% above its estimated GF Value™ of €17.54.
GuruFocus considers TOWA Pharmaceutical Co to be Fairly Valued.
Key valuation signals for FRA:6QC:
ROC %: 3.56%
GF Value™: €17.54 vs. price of €19.60 (11.7% above fair value)
Industry Position: 20.2% below the Drug Manufacturers median
No single metric tells the full story. See the FRA:6QC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
TOWA Pharmaceutical Co Ltd is a Japan based pharmaceutical company engaged in research and development, production, and marketing of generic drugs. It also provides drug consulting services for patients and their families and relatives. It organizes academic seminars for medical professionals and posts articles in journals. It participates in training for pharmacists. The company has three main plants in operation namely Osaka plant, Okayama plant, and Yamagata plant. Towa has offers more than 500 drugs to meet the diverse therapeutic requirements including lifestyle related diseases such as hypertension and diabetes, digestive system diseases, nervous system diseases and allergic diseases, vitamins and antibiotics.
88GF Score
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