Shanghai Fosun Pharmaceutical (Group) Co (HKSE:02196) ROC % : 2.83% (As of Sep. 2024)

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What is Shanghai Fosun Pharmaceutical (Group) 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 %. Shanghai Fosun Pharmaceutical (Group) Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 2.83%.

As of today (2024-12-13), Shanghai Fosun Pharmaceutical (Group) Co's WACC % is 8.25%. Shanghai Fosun Pharmaceutical (Group) Co's ROC % is 2.44% (calculated using TTM income statement data). Shanghai Fosun Pharmaceutical (Group) Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Shanghai Fosun Pharmaceutical (Group) Co ROC % Historical Data

The historical data trend for Shanghai Fosun Pharmaceutical (Group) 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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Shanghai Fosun Pharmaceutical (Group) Co ROC % Chart

Shanghai Fosun Pharmaceutical (Group) Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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3.30

3.51

2.93

3.51

1.43

Shanghai Fosun Pharmaceutical (Group) Co Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															-0.16	-3.09	3.03	2.58	2.83

Shanghai Fosun Pharmaceutical (Group) Co ROC % Calculation

Shanghai Fosun Pharmaceutical (Group) 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 )
=	1709.931 * ( 1 - 11.32% )	/	( (101593.605	+	109987.942)	/ 2 )
=	1516.3668108	/	105790.7735
=	1.43 %

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	))
=	119671.512	-	15865.574	-	( 19173.82	-	max(0, 37184.444	-	39396.777	+	19173.82	))
=	101593.605

	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	))
=	124110.658	-	14084.451	-	( 17043.358	-	max(0, 36923.333	-	36961.598	+	17043.358	))
=	109987.942

Shanghai Fosun Pharmaceutical (Group) Co's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	3815.296 * ( 1 - 15.05% )	/	( (113011.005	+	116218.135)	/ 2 )
=	3241.093952	/	114614.57
=	2.83 %

where

	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	))
=	124381.481	-	14173.739	-	( 17333.437	-	max(0, 40264.731	-	37461.468	+	17333.437	))
=	113011.005

	Invested Capital		(Q: Sep. 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	))
=	126911.781	-	13986.085	-	( 17209.4	-	max(0, 41308.576	-	38016.137	+	17209.4	))
=	116218.135

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

Shanghai Fosun Pharmaceutical (Group) Co (HKSE:02196) 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, Shanghai Fosun Pharmaceutical (Group) Co's WACC % is 8.25%. Shanghai Fosun Pharmaceutical (Group) Co's ROC % is 2.44% (calculated using TTM income statement data). Shanghai Fosun Pharmaceutical (Group) 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.

Shanghai Fosun Pharmaceutical (Group) Co ROC % Related Terms

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Shanghai Fosun Pharmaceutical (Group) Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Shanghai Fosun Pharmaceutical (Group) Co Ltd (HKSE:02196) » Definitions » ROC %

Traded in Other Exchanges

SFOSF:USA 08HH:Germany 08HH:Germany 600196:China

Address

No. 1289 Yishan Road, Building A, Fosun Technology Park, Shanghai, CHN, 200233

Website

https://www.fosunpharma.com

Shanghai Fosun Pharmaceutical (Group) Co Ltd is engaged in the development, manufacture, and sale of pharmaceutical products and medical equipment, the import and export of medical equipment, and the provision of related and other consulting services and investment management. Its business segments are Pharmaceutical manufacturing, Healthcare Services, Medical devices, and medical diagnosis. It generates the majority of its revenue from the Pharmaceutical manufacturing segment. The company considers merger and acquisition investment as a potential component of its operational growth for expanding its research, development, manufacturing, and marketing capabilities. Its geographic areas are the Chinese mainland, Regions outside the Chinese mainland, and other countries.

Executives

Blackrock, Inc.	2201 Interest of corporation controlled by you
Jpmorgan Chase & Co.
Shanghai Fosun High Technology (group) Co., Ltd.
Fosun International Holdings Ltd.	2201 Interest of corporation controlled by you
Fosun International Limited	2101 Beneficial owner
Guo Guangchang	2201 Interest of corporation controlled by you

Shanghai Fosun Pharmaceutical (Group) Co Headlines

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