Easyknit International Holdings (HKSE:01218) ROC % : -0.63% (As of Sep. 2023)

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What is Easyknit International 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 %. Easyknit International Holdings's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was -0.63%.

As of today (2024-06-20), Easyknit International Holdings's WACC % is 3.18%. Easyknit International Holdings's ROC % is -0.72% (calculated using TTM income statement data). Easyknit International Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Easyknit International Holdings ROC % Historical Data

The historical data trend for Easyknit International 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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Easyknit International Holdings ROC % Chart

Easyknit International Holdings Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROC %

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4.95

-0.24

0.57

0.21

-1.07

Easyknit International Holdings Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
ROC %	Get a 7-Day Free Trial															1.00	-0.51	-0.66	-1.15	-0.63

Easyknit International Holdings ROC % Calculation

Easyknit International Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	-61.398 * ( 1 - -41.9% )	/	( (8057.381	+	8294.08)	/ 2 )
=	-87.123762	/	8175.7305
=	-1.07 %

where

	Invested Capital		(A: Mar. 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	))
=	8919.158	-	294.632	-	( 567.145	-	max(0, 1600.717	-	6092.151	+	567.145	))
=	8057.381

	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	))
=	9188.964	-	353.136	-	( 541.748	-	max(0, 2258.017	-	6662.454	+	541.748	))
=	8294.08

Easyknit International Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-52.378 * ( 1 - -0.01% )	/	( (8294.08	+	8232.148)	/ 2 )
=	-52.3832378	/	8263.114
=	-0.63 %

where

	Invested Capital		(Q: 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	))
=	9188.964	-	353.136	-	( 541.748	-	max(0, 2258.017	-	6662.454	+	541.748	))
=	8294.08

	Invested Capital		(Q: Sep. 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	))
=	9227.475	-	367.726	-	( 627.601	-	max(0, 3077.065	-	6790.493	+	627.601	))
=	8232.148

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

Easyknit International Holdings (HKSE:01218) 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, Easyknit International Holdings's WACC % is 3.18%. Easyknit International Holdings's ROC % is -0.72% (calculated using TTM income statement data). Easyknit International 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.

Easyknit International Holdings ROC % Related Terms

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Easyknit International Holdings (HKSE:01218) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Easyknit International Holdings Ltd (HKSE:01218) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

481-483 Castle Peak Road, Block A, 7th Floor, Hong Kong Spinners Building, Phase 6, Kowloon, Cheung Sha Wan, Hong Kong, HKG

Website

https://www.easyknit.com

Easyknit International Holdings Ltd is an investment holding company, that engages in the investment, development, and management of properties. The company operates through Property Investment, Property Development, Investment in Securities, and Loan Financing segments. The investment properties of the company include residential, commercial, and industrial properties. The firm's majority revenue comes from the Property Investment segment. Geographically, it derives revenue from Hong Kong.

Executives

Winterbotham Holdings Limited
Hooper Ivan Geoffrey Douglas
Hooper Christopher Geoffrey Douglas
Markson International Holding Limited
Koon Wing Yee	2101 Beneficial owner
Lui Yuk Chu	2202 Interest of your spouse
Sea Rejoice Limited	2101 Beneficial owner
Accumulate More Profits Limited	2201 Interest of corporation controlled by you
Hooper Christopher Geoffrey Douglas	2201 Interest of corporation controlled by you
Magical Profits Limited	2201 Interest of corporation controlled by you
The Winterbotham Trust Company Limited As Trustee Of The Magical 2000 Trust	2201 Interest of corporation controlled by you
Koon Ho Yan Candy

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