FVTI (Fortune Valley Treasures) ROC % : -103.11% (As of Jun. 2024)

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What is Fortune Valley Treasures 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 %. Fortune Valley Treasures's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -103.11%.

As of today (2024-12-11), Fortune Valley Treasures's WACC % is 39.45%. Fortune Valley Treasures's ROC % is -108.20% (calculated using TTM income statement data). Fortune Valley Treasures earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Fortune Valley Treasures ROC % Historical Data

The historical data trend for Fortune Valley Treasures'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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Fortune Valley Treasures ROC % Chart

Fortune Valley Treasures Annual Data

Trend

Aug15

Aug16

Aug17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-535.21

63.78

20.65

-1.30

-66.66

Fortune Valley Treasures Quarterly Data
	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24
ROC %	Get a 7-Day Free Trial															-23.23	-73.51	-163.34	-109.53	-103.11

Fortune Valley Treasures ROC % Calculation

Fortune Valley Treasures'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 )
=	-3.712 * ( 1 - -2.3% )	/	( (7.326	+	4.068)	/ 2 )
=	-3.797376	/	5.697
=	-66.66 %

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	))
=	9.288	-	1.796	-	( 0.166	-	max(0, 2.485	-	6.871	+	0.166	))
=	7.326

	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	))
=	6.249	-	1.893	-	( 0.288	-	max(0, 3.852	-	5.083	+	0.288	))
=	4.068

Fortune Valley Treasures'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: Mar. 2024 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-3.088 * ( 1 - 0% )	/	( (3.185	+	2.805)	/ 2 )
=	-3.088	/	2.995
=	-103.11 %

where

	Invested Capital		(Q: 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	))
=	5.149	-	1.947	-	( 0.017	-	max(0, 3.821	-	4.098	+	0.017	))
=	3.185

	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	))
=	4.595	-	2.291	-	( 0.007	-	max(0, 4.153	-	3.652	+	0.007	))
=	2.805

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

Fortune Valley Treasures (OTCPK:FVTI) 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, Fortune Valley Treasures's WACC % is 39.45%. Fortune Valley Treasures's ROC % is -108.20% (calculated using TTM income statement data). Fortune Valley Treasures 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.

Fortune Valley Treasures ROC % Related Terms

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Fortune Valley Treasures Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Beverages - Alcoholic » Fortune Valley Treasures Inc (OTCPK:FVTI) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

No. 139 Liansheng Road, 16th Floor, Building 2, A Building, Humen Town, Guangdong, Dongguan, CHN, 523000

Website

http://www.fvti.show

Fortune Valley Treasures Inc is engaged in operations of wholesale distribution and retail sales of alcoholic beverages of wine and distilled liquors, and drinking water. The company is into acquiring businesses that are in the food, beverage, and alcohol industries. Its products include a variety of wines, such as dry red wine, dry white wine, rose wine, and sweet wine, and other products. Its products are sold to retailers, such as wine shops, convenience stores, and supermarkets.

Executives

Kaihong Lin	director, officer: CFO, Treasurer, Director	NO. 10 OF TUANJIE 2ND ROAD, BEICE, HUMEN, DONGGUAN, GUANGDONG F4 518000
Xinlong Shen	director, officer: CEO, CFO	19F, LIANHE TOWER, 1069 NANHAI AVE,, NANSHAN DISTRICT, SHENZHEN F4 518000

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