Cafe de Coral Holdings (HKSE:00341) ROC % : 6.21% (As of Sep. 2024)

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What is Cafe de Coral 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 %. Cafe de Coral Holdings's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 6.21%.

As of today (2024-12-15), Cafe de Coral Holdings's WACC % is 7.16%. Cafe de Coral Holdings's ROC % is 6.36% (calculated using TTM income statement data). Cafe de Coral Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Cafe de Coral Holdings ROC % Historical Data

The historical data trend for Cafe de Coral 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.

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Cafe de Coral Holdings ROC % Chart

Cafe de Coral Holdings Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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3.21

8.78

1.78

2.75

6.70

Cafe de Coral Holdings Semi-Annual Data
	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23	Mar24	Sep24
ROC %	Get a 7-Day Free Trial															4.65	0.22	7.19	6.51	6.21

Cafe de Coral Holdings ROC % Calculation

Cafe de Coral Holdings'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 )
=	487.394 * ( 1 - 14.46% )	/	( (6788.32	+	5660.725)	/ 2 )
=	416.9168276	/	6224.5225
=	6.70 %

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	))
=	7175.34	-	1039.217	-	( 1671.978	-	max(0, 2779.796	-	2127.599	+	1671.978	))
=	6788.32

	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	))
=	6513.924	-	1054.026	-	( 1260.948	-	max(0, 1908.093	-	1707.266	+	1260.948	))
=	5660.725

Cafe de Coral Holdings'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: Mar. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	392.372 * ( 1 - 11.12% )	/	( (5660.725	+	5565.101)	/ 2 )
=	348.7402336	/	5612.913
=	6.21 %

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	))
=	6513.924	-	1054.026	-	( 1260.948	-	max(0, 1908.093	-	1707.266	+	1260.948	))
=	5660.725

	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	))
=	6228.821	-	1043.68	-	( 1071.105	-	max(0, 1894.599	-	1514.639	+	1071.105	))
=	5565.101

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

Cafe de Coral Holdings (HKSE:00341) 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, Cafe de Coral Holdings's WACC % is 7.16%. Cafe de Coral Holdings's ROC % is 6.36% (calculated using TTM income statement data). Cafe de Coral 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.

Cafe de Coral Holdings ROC % Related Terms

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Cafe de Coral Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » Cafe de Coral Holdings Ltd (HKSE:00341) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

5 Wo Shui Street, 10th Floor, Cafe de Coral Centre, Fo Tan Shatin, New Territories, Hong Kong, HKG

Website

https://www.cafedecoral.com

Cafe de Coral Holdings Ltd is a restaurant and catering company. It operates quick service restaurants and institutional catering, fast casual and casual dining chains, as well as food processing and distribution business. Geographically, it derives a majority of revenue from Hong Kong and also has a presence in Mainland China.

Executives

Lo Tak Shing, Peter	2501 Other
Sky Bright International Limited	2201 Interest of corporation controlled by you
Verdant Success Holdings Limited	2201 Interest of corporation controlled by you
Wandels Investment Limited	2101 Beneficial owner
Butterfield Trust (guernsey) Limited	2301 Trustee
Ng Yuen Han	2202 Interest of your spouse
Victor Reach Investments Limited	2101 Beneficial owner
Lo Hoi Kwong, Sunny	2201 Interest of corporation controlled by you
Mondrian Investment Partners Limited	2102 Investment manager
Sky Bright International Ltd.	2201 Interest of corporation controlled by you
Verdant Success Holdings Ltd.	2201 Interest of corporation controlled by you
Ardley Enterprises (ptc) Limited	2301 Trustee
Tso Po Ping	2202 Interest of your spouse

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