Virscend Education Co (HKSE:01565) ROC % : 2.74% (As of Aug. 2024)

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What is Virscend Education 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 %. Virscend Education Co's annualized return on capital (ROC %) for the quarter that ended in Aug. 2024 was 2.74%.

As of today (2025-03-27), Virscend Education Co's WACC % is 5.15%. Virscend Education Co's ROC % is 3.37% (calculated using TTM income statement data). Virscend Education Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Virscend Education Co ROC % Historical Data

The historical data trend for Virscend Education 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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Virscend Education Co ROC % Chart

Virscend Education Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Aug22

Aug23

Aug24

ROC %

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7.32

-1.89

0.83

1.97

3.30

Virscend Education Co Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Feb22	Aug22	Feb23	Aug23	Feb24	Aug24
ROC %	Get a 7-Day Free Trial															0.96	2.96	1.20	4.02	2.74

Virscend Education Co ROC % Calculation

Virscend Education Co's annualized Return on Capital (ROC %) for the fiscal year that ended in Aug. 2024 is calculated as:

	ROC % (A: Aug. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Aug. 2023 )	+	Invested Capital (A: Aug. 2024 ))	/ count )
=	201.869 * ( 1 - 9.46% )	/	( (5588.388	+	5482.508)	/ 2 )
=	182.7721926	/	5535.448
=	3.30 %

where

	Invested Capital		(A: Aug. 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	))
=	4896.715	-	97.78	-	( 854.876	-	max(0, 1895.476	-	1106.023	+	854.876	))
=	5588.388

	Invested Capital		(A: Aug. 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	))
=	4873.559	-	133.632	-	( 928.81	-	max(0, 1799.065	-	1056.484	+	928.81	))
=	5482.508

Virscend Education Co's annualized Return on Capital (ROC %) for the quarter that ended in Aug. 2024 is calculated as:

	ROC % (Q: Aug. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Feb. 2024 )	+	Invested Capital (Q: Aug. 2024 ))	/ count )
=	169.262 * ( 1 - 13.68% )	/	( (5172.19	+	5482.508)	/ 2 )
=	146.1069584	/	5327.349
=	2.74 %

where

	Invested Capital		(Q: Feb. 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	))
=	4592.911	-	159.864	-	( 573.163	-	max(0, 1495.957	-	756.814	+	573.163	))
=	5172.19

	Invested Capital		(Q: Aug. 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	))
=	4873.559	-	133.632	-	( 928.81	-	max(0, 1799.065	-	1056.484	+	928.81	))
=	5482.508

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

Virscend Education Co (HKSE:01565) 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, Virscend Education Co's WACC % is 5.15%. Virscend Education Co's ROC % is 3.37% (calculated using TTM income statement data). Virscend Education Co 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.

Virscend Education Co ROC % Related Terms

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Virscend Education Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Education » Virscend Education Co Ltd (HKSE:01565) » Definitions » ROC %

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Traded in Other Exchanges

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Address

No. 18 Sandongqiao Road, Jinniu District, Chengdu, CHN

Website

http://www.virscendeducation.com

Virscend Education Co Ltd is a provider of K-12 private education services. The company is a provider of high school and university private education services in Southwest China. The firm's formal education industry consists of education for pre-school, primary, middle, and high school students with a total of over 16-second foreign language-based classes to its students which include German, French, and Japanese, among other languages. The majority of the company revenues are generated through tuition fees.

Executives

Wang Xiaoying	2202 Interest of your spouse
Yan Yude	2201 Interest of corporation controlled by you
Bank Of China Limited	2106 Person having a security interest in shares
The Bank Of New York Mellon Corporation	2201 Interest of corporation controlled by you
Invesco Canada Ltd.	2102 Investment manager
Virscend Holdings Company Limited	2101 Beneficial owner

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