China Yurun Food Group (HKSE:01068) ROC % : 2.28% (As of Jun. 2024)

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What is China Yurun Food Group 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 Yurun Food Group's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 2.28%.

As of today (2024-12-12), China Yurun Food Group's WACC % is 9.33%. China Yurun Food Group's ROC % is -2.21% (calculated using TTM income statement data). China Yurun Food Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China Yurun Food Group ROC % Historical Data

The historical data trend for China Yurun Food Group'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 Yurun Food Group ROC % Chart

China Yurun Food Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-21.49

-13.25

-5.79

-0.51

-5.46

China Yurun Food Group 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															1.21	-2.12	-4.19	-6.41	2.28

China Yurun Food Group ROC % Calculation

China Yurun Food Group'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 )
=	-60.114 * ( 1 - 3.17% )	/	( (1219.25	+	914.478)	/ 2 )
=	-58.2083862	/	1066.864
=	-5.46 %

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	))
=	1176.915	-	995.277	-	( 33.21	-	max(0, 1578.789	-	541.177	+	33.21	))
=	1219.25

	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	))
=	1011.951	-	1076.714	-	( 39.298	-	max(0, 1617.367	-	638.126	+	39.298	))
=	914.478

China Yurun Food Group'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 )
=	21 * ( 1 - 0.34% )	/	( (914.478	+	921.361)	/ 2 )
=	20.9286	/	917.9195
=	2.28 %

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	))
=	1011.951	-	1076.714	-	( 39.298	-	max(0, 1617.367	-	638.126	+	39.298	))
=	914.478

	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	))
=	957.909	-	1055.209	-	( 31.666	-	max(0, 1612.487	-	593.826	+	31.666	))
=	921.361

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

China Yurun Food Group (HKSE:01068) 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 Yurun Food Group's WACC % is 9.33%. China Yurun Food Group's ROC % is -2.21% (calculated using TTM income statement data). China Yurun Food Group 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 Yurun Food Group ROC % Related Terms

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China Yurun Food Group Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » China Yurun Food Group Ltd (HKSE:01068) » Definitions » ROC %

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Traded in Other Exchanges

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Address

10 Yurun Road, Jianye District, Nanjing, CHN, 210041

Website

http://www.yurun.com.hk

China Yurun Food Group Ltd is mainly engaged in the provision of a wide range of meat and processed meat including chilled and frozen meat, low-temperature meat products and high-temperature meat products, and others. The company operates through two business segments namely Chilled and frozen meat and Processed meat products. The Chilled and frozen meat is involved in the business of slaughtering, production, and sales of chilled and frozen meat whereas the Processed meat products segment manufactures and distributes processed meat products. The company markets its products under the brand name of Yurun, Furun, Wangrun, and Popular Meat Packing. China Yurun generates all the revenue from the sale of meat products in the People's Republic of China.

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