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 Leon Inspection Holding's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 35.47%.
As of today (2025-03-30), China Leon Inspection Holding's WACC % is 5.93%. China Leon Inspection Holding's ROC % is 32.15% (calculated using TTM income statement data).
China Leon Inspection Holding 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.
China Leon Inspection Holding ROC % Historical Data
* 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.
Note:
The Operating Income data used here is two times the semi-annual (Jun. 2024) data.
* 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.
China Leon Inspection Holding (HKSE:01586) 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 Leon Inspection Holding's WACC % is 5.93%. China Leon Inspection Holding's ROC % is 32.15% (calculated using TTM income statement data).
China Leon Inspection Holding 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.
China Leon Inspection Holding ROC % Related Terms
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China Leon Inspection Holding Business Description
China Leon Inspection Holding Ltd is a coal testing inspection services provider. Its business scope includes Testing services, Surveying services, Witnessing and Ancillary services, and technical and consulting services. Testing services focus on the quality assurance of coal; Surveying services include a draft survey to determine or verify the coal quantity, and it also provides witnessing services by observing testing and inspection activities conducted by the counterparties of its customers to detect dishonesty or abnormality. It operates in Mainland China, Indonesia, and other countries, from which it generates the majority of its revenue from Mainland China.
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