Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co (HKSE:01379) ROC % : 3.63% (As of Dec. 2023)

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What is Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co 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 %. Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 3.63%.

As of today (2024-05-26), Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co's WACC % is 3.16%. Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co's ROC % is 3.93% (calculated using TTM income statement data). Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co ROC % Historical Data

The historical data trend for Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co'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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Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co ROC % Chart

Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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2.56

2.41

2.88

4.60

3.89

Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co Semi-Annual Data
	Dec15	Dec16	Dec17	Dec18	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial								2.09	2.17	6.94	4.28	3.63

Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co ROC % Calculation

Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co'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 )
=	60.953 * ( 1 - 21.11% )	/	( (1263.009	+	1210.94)	/ 2 )
=	48.0858217	/	1236.9745
=	3.89 %

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	))
=	1306.487	-	71.75	-	( 81.326	-	max(0, 142.285	-	114.013	+	81.326	))
=	1263.009

	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	))
=	1236.171	-	32.436	-	( 81.418	-	max(0, 92.259	-	85.054	+	81.418	))
=	1210.94

Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co'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 )
=	53.978 * ( 1 - 19.05% )	/	( (1196.955	+	1210.94)	/ 2 )
=	43.695191	/	1203.9475
=	3.63 %

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	))
=	1204.979	-	31.833	-	( 41.502	-	max(0, 67.565	-	43.756	+	41.502	))
=	1196.955

	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	))
=	1236.171	-	32.436	-	( 81.418	-	max(0, 92.259	-	85.054	+	81.418	))
=	1210.94

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

Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co (HKSE:01379) 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, Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co's WACC % is 3.16%. Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co's ROC % is 3.93% (calculated using TTM income statement data). Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

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Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co (HKSE:01379) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co Ltd (HKSE:01379) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

Qianyangxia Village, Wenqiao Town, Zhejiang Province, Wenling, CHN

Website

https://www.cnglj.com

Wenling Zhejiang Measuring And Cutting Tools Trading Centre Co Ltd is engaged in an established measuring and cutting tools trading centre operator in China. The principal activity and source of revenue of the group were primarily derived from the property leasing business through the operation of the Trading Centre for the measuring and cutting tools industry. The group also engages in real estate investment, development and management business through its material subsidiary, Wenling Sunrise Real Estate Development Co., Ltd.

Executives

Jia Xing Yuan Tai Gu Quan Tou Zi He Huo Qi Ye You Xian He Huo	2101 Beneficial owner
Xiang Gang Lei Gen Tou Zi Zhong Xin You Xian Gong Si	2101 Beneficial owner
Zhe Jiang Qian Jiang Mo Tuo Gu Fen You Xian Gong Si	2101 Beneficial owner
Wan Bang De Hang Zhou Tou Zi Guan Li You Xian Gong Si	2101 Beneficial owner
Zhe Jiang Zhong Ma Chuan Dong Gu Fen You Xian Gong Si	2101 Beneficial owner
Xin Jie Beng Ye Zhe Jiang You Xian Gong Si	2201 Interest of corporation controlled by you
Xin Jie Beng Ye Xiang Gang You Xian Gong Si	2101 Beneficial owner
Wen Ling Long Xi Qi Ye Guan Li Zhong Xin You Xian He Huo	2201 Interest of corporation controlled by you
Han Yi	2101 Beneficial owner

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