Luen Thai Holdings (HKSE:00311) ROC % : -1.63% (As of Jun. 2024)

View and export this data going back to 2004. Start your Free Trial

What is Luen Thai Holdings 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 %. Luen Thai Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -1.63%.

As of today (2024-12-14), Luen Thai Holdings's WACC % is 7.77%. Luen Thai Holdings's ROC % is -0.56% (calculated using TTM income statement data). Luen Thai Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Luen Thai Holdings ROC % Historical Data

The historical data trend for Luen Thai Holdings'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.

Luen Thai Holdings ROC % Chart

Luen Thai Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

Get a 7-Day Free Trial

5.58

-6.22

4.07

3.97

1.57

Luen Thai Holdings Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															4.99	2.76	0.11	0.37	-1.63

Luen Thai Holdings ROC % Calculation

Luen Thai Holdings'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 )
=	42.071 * ( 1 - -6.53% )	/	( (2991.556	+	2734.36)	/ 2 )
=	44.8182363	/	2862.958
=	1.57 %

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	))
=	4041.277	-	797.069	-	( 731.454	-	max(0, 2179.912	-	2432.564	+	731.454	))
=	2991.556

	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	))
=	3709.632	-	710.403	-	( 591.827	-	max(0, 1973.201	-	2238.07	+	591.827	))
=	2734.36

Luen Thai Holdings'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 )
=	-40.378 * ( 1 - -13.34% )	/	( (2734.36	+	2868.058)	/ 2 )
=	-45.7644252	/	2801.209
=	-1.63 %

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	))
=	3709.632	-	710.403	-	( 591.827	-	max(0, 1973.201	-	2238.07	+	591.827	))
=	2734.36

	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	))
=	4001.586	-	922.548	-	( 634.266	-	max(0, 2379.566	-	2590.546	+	634.266	))
=	2868.058

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

Luen Thai Holdings (HKSE:00311) 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, Luen Thai Holdings's WACC % is 7.77%. Luen Thai Holdings's ROC % is -0.56% (calculated using TTM income statement data). Luen Thai Holdings 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.

Luen Thai Holdings ROC % Related Terms

Thank you for viewing the detailed overview of Luen Thai Holdings's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Luen Thai Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » Luen Thai Holdings Ltd (HKSE:00311) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

LTJ:Germany

Address

57 Hung To Road, Rooms 1001-1005, 10th Floor, Nanyang Plaza, Kwun Tong, Kowloon, Hong Kong, HKG

Website

https://www2.luenthai.com

Luen Thai Holdings Ltd is engaged in the manufacturing and trading of apparel and accessories. The company has a diverse product range that includes Fashion and Sleepwear, Sports Active Wear, Sweaters and Outerwear, Casual Knits and Woven Wear, and Accessories. It derives revenue mainly from sales of apparel and accessories. Its revenue is mainly derived from customers located in the United States of America, the PRC, Europe, Canada, and Japan, while the company's business activities are conducted predominantly in Hong Kong, Macao, the PRC, the Philippines, Cambodia, the United States, and Myanmar.

Executives

Dong Fang Guo Ji Ji Tuan You Xian Gong Si	2101 Beneficial owner
Shang Hai Guo Sheng Ji Tuan You Xian Gong Si	2101 Beneficial owner
Shang Hai Fang Zhi Ji Tuan You Xian Gong Si	2101 Beneficial owner
Tan Chiu Joise	2202 Interest of your spouse
Tan Henry	2201 Interest of corporation controlled by you
Double Joy Investments Limited	2101 Beneficial owner

Luen Thai Holdings Headlines

No Headlines