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Hitek Global (Hitek Global) ROC % : 0.11% (As of Dec. 2023)


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What is Hitek Global 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 %. Hitek Global's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 0.11%.

As of today (2024-06-08), Hitek Global's WACC % is 10.06%. Hitek Global's ROC % is 2.88% (calculated using TTM income statement data). Hitek Global earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Hitek Global ROC % Historical Data

The historical data trend for Hitek Global'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.

* Premium members only.

Hitek Global ROC % Chart

Hitek Global Annual Data
Trend Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROC %
Get a 7-Day Free Trial 30.01 20.49 19.98 11.90 3.20

Hitek Global Semi-Annual Data
Dec17 Jun18 Dec18 Jun19 Dec19 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23
ROC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only 18.97 10.17 10.16 5.50 0.11

Hitek Global ROC % Calculation

Hitek Global'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 )
=0.671 * ( 1 - 34.29% )/( (12.994 + 14.574)/ 2 )
=0.4409141/13.784
=3.20 %

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))
=21.205 - 2.717 - ( 5.494 - max(0, 4.204 - 11.185+5.494))
=12.994

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))
=35.428 - 2.705 - ( 18.149 - max(0, 3.373 - 24.787+18.149))
=14.574

Hitek Global's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

ROC % (Q: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2023 ) + Invested Capital (Q: Dec. 2023 ))/ count )
=0.028 * ( 1 - 34.16% )/( (18.38 + 14.574)/ 2 )
=0.0184352/16.477
=0.11 %

where

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))
=33.182 - 2.58 - ( 12.222 - max(0, 5.708 - 22.375+12.222))
=18.38

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))
=35.428 - 2.705 - ( 18.149 - max(0, 3.373 - 24.787+18.149))
=14.574

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

* 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.

Hitek Global  (NAS:HKIT) 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, Hitek Global's WACC % is 10.06%. Hitek Global's ROC % is 2.88% (calculated using TTM income statement data). Hitek Global 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.

Hitek Global ROC % Related Terms

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Hitek Global (Hitek Global) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Technology » Software » Hitek Global Inc (NAS:HKIT) » Definitions » ROC %
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Traded in Other Exchanges
4JX:Germany
Address
No. 30 Guanri Road, Siming District, Unit 304, Fujian Province, Phase II, Software Park, Xiamen, CHN
Website
http://www.xmhitek.com
Hitek Global Inc is a provider of information technology consulting and solutions services. The company has two lines of businesses such as services to small and medium businesses, which consist of Anti-Counterfeiting Tax Control System tax devices, including Golden Tax Disk and printers, ACTCS services, and IT services; and services to large businesses, which include hardware sales and software sales. It generates revenues from hardware sales, software sales, IT services, and tax devices and services.