Shibaura Machine Co (FRA:TOA) ROC % : 9.64% (As of Sep. 2024)

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What is Shibaura Machine 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 %. Shibaura Machine Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 9.64%.

As of today (2024-12-15), Shibaura Machine Co's WACC % is 8.41%. Shibaura Machine Co's ROC % is 6.44% (calculated using TTM income statement data). Shibaura Machine Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Shibaura Machine Co ROC % Historical Data

The historical data trend for Shibaura Machine 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.

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Shibaura Machine Co ROC % Chart

Shibaura Machine Co Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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2.42

-5.29

4.67

5.29

6.43

Shibaura Machine Co Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															11.84	2.56	6.29	6.24	9.64

Shibaura Machine Co ROC % Calculation

Shibaura Machine Co's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	83.637 * ( 1 - 29.23% )	/	( (818.814	+	1021.533)	/ 2 )
=	59.1899049	/	920.1735
=	6.43 %

where

	Invested Capital		(A: 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	))
=	1433.168	-	258.997	-	( 355.357	-	max(0, 747.686	-	1210.877	+	355.357	))
=	818.814

	Invested Capital		(A: 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	))
=	1554.668	-	215.848	-	( 317.287	-	max(0, 800.319	-	1246.936	+	317.287	))
=	1021.533

Shibaura Machine Co's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	112.944 * ( 1 - 25.17% )	/	( (0	+	876.847)	/ 1 )
=	84.5159952	/	876.847
=	9.64 %

where

	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	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

	Invested Capital		(Q: Sep. 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	))
=	1399.306	-	158.621	-	( 363.838	-	max(0, 618.55	-	1105.404	+	363.838	))
=	876.847

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

Shibaura Machine Co (FRA:TOA) 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, Shibaura Machine Co's WACC % is 8.41%. Shibaura Machine Co's ROC % is 6.44% (calculated using TTM income statement data). Shibaura Machine 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.

Shibaura Machine Co ROC % Related Terms

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Shibaura Machine Co Business Description

Industry

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Traded in Other Exchanges

6104:Japan

Address

2068-3 Ooka, Shizuoka Prefecture, Numazu, JPN, 410-8510

Website

http://www.toshiba-machine.co.jp

Shibaura Machine Co Ltd is engaged in manufacturing and distribution of molding machineries and machine tools. The business of the company is divided into two segments: molding machinery and machine tools. The company's product portfolio comprises injection molding machines, die-casting machines, plastic extrusion, large-size machine tools, portal-type machine tools, machining centers, horizontal boring machines, and high-precision machines, among others. The company's products are used in manufacturing of computers, automobile engines, transmissions, medical products, high-precision lenses, displays, construction machines, and wind power generation. A vast majority of the company's revenue is generated by the molding machinery segment, and the company earns most of its revenue in Japan.

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