Eternity Investment (HKSE:00764) ROC % : -9.51% (As of Dec. 2023)

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What is Eternity Investment 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 %. Eternity Investment's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -9.51%.

As of today (2024-05-26), Eternity Investment's WACC % is 6.77%. Eternity Investment's ROC % is -5.35% (calculated using TTM income statement data). Eternity Investment earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Eternity Investment ROC % Historical Data

The historical data trend for Eternity Investment'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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Eternity Investment ROC % Chart

Eternity Investment Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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0.42

-3.65

-4.73

-5.23

-5.39

Eternity Investment Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															-7.42	-1.22	-9.11	-1.47	-9.51

Eternity Investment ROC % Calculation

Eternity Investment'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 )
=	-168.558 * ( 1 - -7.47% )	/	( (3583.514	+	3143.698)	/ 2 )
=	-181.1492826	/	3363.606
=	-5.39 %

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	))
=	3457.47	-	115.853	-	( 160.675	-	max(0, 1119.801	-	877.904	+	160.675	))
=	3583.514

	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	))
=	3074.573	-	236.86	-	( 115.675	-	max(0, 901.322	-	595.337	+	115.675	))
=	3143.698

Eternity Investment'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 )
=	-284.104 * ( 1 - -10.04% )	/	( (3434.304	+	3143.698)	/ 2 )
=	-312.6280416	/	3289.001
=	-9.51 %

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	))
=	3349.653	-	164.496	-	( 161.334	-	max(0, 1095.295	-	846.148	+	161.334	))
=	3434.304

	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	))
=	3074.573	-	236.86	-	( 115.675	-	max(0, 901.322	-	595.337	+	115.675	))
=	3143.698

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

Eternity Investment (HKSE:00764) 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, Eternity Investment's WACC % is 6.77%. Eternity Investment's ROC % is -5.35% (calculated using TTM income statement data). Eternity Investment 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.

Eternity Investment ROC % Related Terms

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Eternity Investment (HKSE:00764) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » Eternity Investment Ltd (HKSE:00764) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

168-200 Connaught Road Central, Unit 1211, Shun Tak Centre, West Tower, Hong Kong, HKG

Website

http://www.eternityinv.com.hk

Eternity Investment Ltd is an investment holding company. The company along with its subsidiaries is engaged in the sale of jewelry products. It operates in four segments Property investment, Sale of financial assets, Moneylending, and Design and sale of jewelry products, and precious stones segment. It generates the highest revenue from the money lending business. The company has a global presence with the majority of the revenue generated from Hong Kong.

Executives

Chu Yuet Wah	2201 Interest of corporation controlled by you
Silver Pacific Development Limited	2201 Interest of corporation controlled by you
Twin Success International Limited	2101 Beneficial owner
Guan Jian	2201 Interest of corporation controlled by you
Lei Hong Wai	2101 Beneficial owner
Cheung Kwok Wai Elton	2101 Beneficial owner
Silver Pacific International Limited	2201 Interest of corporation controlled by you
Ample Cheer Limited	2201 Interest of corporation controlled by you
Kingston Finance Limited	2106 Person having a security interest in shares

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