China East Education Holdings (HKSE:00667) ROC % : 7.24% (As of Jun. 2024)

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What is China East Education 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 %. China East Education Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 7.24%.

As of today (2025-03-29), China East Education Holdings's WACC % is 12.95%. China East Education Holdings's ROC % is 4.92% (calculated using TTM income statement data). China East Education Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China East Education Holdings ROC % Historical Data

The historical data trend for China East Education 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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China East Education Holdings ROC % Chart

China East Education Holdings Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Dec24

ROC %

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6.72

6.85

4.95

3.78

7.04

China East Education Holdings Semi-Annual Data
	Dec16	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24	Dec24
ROC %	Get a 7-Day Free Trial											2.90	5.03	2.54	7.24	6.72

China East Education Holdings ROC % Calculation

China East Education 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 )
=	392.624 * ( 1 - 25.92% )	/	( (7652.029	+	7731.185)	/ 2 )
=	290.8558592	/	7691.607
=	3.78 %

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	))
=	10596.145	-	729.468	-	( 4276.592	-	max(0, 2604.506	-	4819.154	+	4276.592	))
=	7652.029

	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	))
=	10162.445	-	709.061	-	( 3752.701	-	max(0, 2552.195	-	4274.394	+	3752.701	))
=	7731.185

China East Education 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 )
=	726.526 * ( 1 - 21.54% )	/	( (7731.185	+	8007.296)	/ 2 )
=	570.0322996	/	7869.2405
=	7.24 %

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	))
=	10162.445	-	709.061	-	( 3752.701	-	max(0, 2552.195	-	4274.394	+	3752.701	))
=	7731.185

	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	))
=	9968.113	-	638.583	-	( 3520.803	-	max(0, 2688.643	-	4010.877	+	3520.803	))
=	8007.296

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

China East Education Holdings (HKSE:00667) 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, China East Education Holdings's WACC % is 12.95%. China East Education Holdings's ROC % is 4.92% (calculated using TTM income statement data). China East Education 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.

China East Education Holdings ROC % Related Terms

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China East Education Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Education » China East Education Holdings Ltd (HKSE:00667) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

ZX3:Germany

Address

No. 1009 Xuelin Road, Vocational Education Town, Yaohai District, Anhui Province, Hefei, CHN

Website

https://www.chinaeastedu.com

China East Education is the largest vocational training education provider in China in terms of average students enrolled. It was founded in 1988 and its business spans four segments: culinary arts, information & internet technology, auto services, and fashion & beauty. It runs schools under six brands: New East, Omick, Xinhua Internet, Wisezone, Wontone, and On-mind. It also operates customized catering experience centers under Cuisine Academy. Its average students enrolled was 146,839 as of Dec. 31, 2023. In 2023, China East Education's revenue breakdown by major businesses was 56% in culinary arts, 20% in information & internet technology, 21% in auto services.

Executives

Wei Zhiling	2202 Interest of your spouse
Xiao Guoqing	2201 Interest of corporation controlled by you
Xiao Guoqing Education Company Limited	2101 Beneficial owner
Wu Junbao	2201 Interest of corporation controlled by you
Wu Junbao Education Company Limited	2101 Beneficial owner
Zhou Jiaju	2202 Interest of your spouse
Cheng Jing	2202 Interest of your spouse
Wu Wei	2201 Interest of corporation controlled by you
Wu Wei Education Company Limited	2101 Beneficial owner

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