RedFish LongTerm Capital SpA (FRA:HN5) ROC % : -2.78% (As of Jun. 2024)

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What is RedFish LongTerm Capital SpA 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 %. RedFish LongTerm Capital SpA's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -2.78%.

As of today (2024-12-13), RedFish LongTerm Capital SpA's WACC % is 9.45%. RedFish LongTerm Capital SpA's ROC % is -2.16% (calculated using TTM income statement data). RedFish LongTerm Capital SpA earns returns that do not match up to its cost of capital. It will destroy value as it grows.

RedFish LongTerm Capital SpA ROC % Historical Data

The historical data trend for RedFish LongTerm Capital SpA'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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RedFish LongTerm Capital SpA ROC % Chart

RedFish LongTerm Capital SpA Annual Data

Trend

Dec21

Dec22

Dec23

ROC %

-2.18

-3.06

-0.39

RedFish LongTerm Capital SpA Semi-Annual Data
	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial			-7.46	-	0.51	-1.57	-2.78

RedFish LongTerm Capital SpA ROC % Calculation

RedFish LongTerm Capital SpA'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 )
=	-0.094 * ( 1 - -19.59% )	/	( (17.801	+	39.774)	/ 2 )
=	-0.1124146	/	28.7875
=	-0.39 %

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	))
=	35.789	-	0.505	-	( 20.69	-	max(0, 3.501	-	20.984	+	20.69	))
=	17.801

	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	))
=	61.021	-	12.257	-	( 10.973	-	max(0, 14.824	-	23.814	+	10.973	))
=	39.774

RedFish LongTerm Capital SpA's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-1.824 * ( 1 - -0.25% )	/	( (39.774	+	91.849)	/ 2 )
=	-1.82856	/	65.8115
=	-2.78 %

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	))
=	61.021	-	12.257	-	( 10.973	-	max(0, 14.824	-	23.814	+	10.973	))
=	39.774

	Invested Capital		(Q: Jun. 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	))
=	124.076	-	19.956	-	( 12.271	-	max(0, 32.205	-	45.577	+	12.271	))
=	91.849

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

RedFish LongTerm Capital SpA (FRA:HN5) 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, RedFish LongTerm Capital SpA's WACC % is 9.45%. RedFish LongTerm Capital SpA's ROC % is -2.16% (calculated using TTM income statement data). RedFish LongTerm Capital SpA 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.

RedFish LongTerm Capital SpA ROC % Related Terms

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RedFish LongTerm Capital SpA Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » RedFish LongTerm Capital SpA (FRA:HN5) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

RFLTC:Italy

Address

Via del Carmine, 11, Milano, ITA, 20121

Website

https://longterm.redfish.capital

RedFish LongTerm Capital SpA is an industrial holding company specializing in the acquisition of shares in family-run Italian SMEs. The company acquires qualified minority or majority shareholdings with the intention of maintaining these investments over a long period of time, either through its investment or through club deal structures, with the involvement of other investors. The role of the company in the ecosystem of its subsidiaries is to support them in increasing some critical areas by providing them with support services to managers for the financial side, management control and debt optimization, but above all advisory services for the acquisition of Target Companies in order to pursue the development plan for external lines.

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