WuXi XDC Cayman (FRA:L74) ROC % : 20.41% (As of Jun. 2023)

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What is WuXi XDC Cayman 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 %. WuXi XDC Cayman's annualized return on capital (ROC %) for the quarter that ended in Jun. 2023 was 20.41%.

As of today (2024-05-23), WuXi XDC Cayman's WACC % is 10.40%. WuXi XDC Cayman's ROC % is 9.66% (calculated using TTM income statement data). WuXi XDC Cayman earns returns that do not match up to its cost of capital. It will destroy value as it grows.

WuXi XDC Cayman ROC % Historical Data

The historical data trend for WuXi XDC Cayman'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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WuXi XDC Cayman ROC % Chart

WuXi XDC Cayman Annual Data

Trend

Dec20

Dec21

Dec22

Dec23

ROC %

7.84

11.87

14.68

15.71

WuXi XDC Cayman Quarterly Data
	Dec20	Dec21	Mar22	Jun22	Dec22	Mar23	Jun23	Dec23
ROC %	Get a 7-Day Free Trial			-	-	20.89	20.41	-

WuXi XDC Cayman ROC % Calculation

WuXi XDC Cayman'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 )
=	41.91 * ( 1 - 21.15% )	/	( (179.168	+	241.498)	/ 2 )
=	33.046035	/	210.333
=	15.71 %

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	))
=	338.021	-	106.268	-	( 99.519	-	max(0, 137.297	-	189.882	+	99.519	))
=	179.168

	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	))
=	865.002	-	119.994	-	( 519.822	-	max(0, 164.312	-	667.822	+	519.822	))
=	241.498

WuXi XDC Cayman's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2023 is calculated as:

	ROC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	45.648 * ( 1 - 14.25% )	/	( (186.581	+	197.046)	/ 2 )
=	39.14316	/	191.8135
=	20.41 %

where

	Invested Capital		(Q: Mar. 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	))
=	351.746	-	110.103	-	( 73.421	-	max(0, 136.758	-	191.82	+	73.421	))
=	186.581

	Invested Capital		(Q: Jun. 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	))
=	353.14	-	102.576	-	( 72.388	-	max(0, 133.893	-	187.411	+	72.388	))
=	197.046

Note: The Operating Income data used here is four times the quarterly (Jun. 2023) data.

WuXi XDC Cayman (FRA:L74) 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, WuXi XDC Cayman's WACC % is 10.40%. WuXi XDC Cayman's ROC % is 9.66% (calculated using TTM income statement data). WuXi XDC Cayman 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.

WuXi XDC Cayman ROC % Related Terms

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WuXi XDC Cayman (FRA:L74) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Diagnostics & Research » WuXi XDC Cayman Inc (FRA:L74) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

02268:Hong Kong

Address

No. 11 Xinhui Ring Road, Xinwu, Jiangsu, Wuxi, CHN

Website

WuXi XDC Cayman Inc is a leading CRDMO focused on the global ADC and broader bioconjugate market and the only one dedicated to providing integrated and end-to-end services. Leveraging expertise in both biologics and small molecules, It offers interdisciplinary and comprehensive services, covering bioconjugate discovery, research, development and manufacturing. The company provides these services from proximately located, state-of-the-art laboratories and manufacturing facilities, leading to the significant reduction of development timeline and costs. As a fully integrated one-stop bioconjugate discovery, development and manufacturing platform, its mission is to continuously enhance its platform, and propel and transform the development of the bioconjugate industry.

WuXi XDC Cayman (FRA:L74) Headlines

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