World-Link Logistics (Asia) Holding (HKSE:06083) ROC % : 19.44% (As of Dec. 2023)

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What is World-Link Logistics (Asia) Holding 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 %. World-Link Logistics (Asia) Holding's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 19.44%.

As of today (2024-05-16), World-Link Logistics (Asia) Holding's WACC % is 5.06%. World-Link Logistics (Asia) Holding's ROC % is 16.28% (calculated using TTM income statement data). World-Link Logistics (Asia) 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.

World-Link Logistics (Asia) Holding ROC % Historical Data

The historical data trend for World-Link Logistics (Asia) Holding'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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World-Link Logistics (Asia) Holding ROC % Chart

World-Link Logistics (Asia) Holding Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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23.99

18.22

10.82

13.69

16.30

World-Link Logistics (Asia) Holding Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial														-10.12	31.01	-8.17	13.30	19.44

World-Link Logistics (Asia) Holding ROC % Calculation

World-Link Logistics (Asia) Holding'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 )
=	24.185 * ( 1 - 16.41% )	/	( (134.633	+	113.406)	/ 2 )
=	20.2162415	/	124.0195
=	16.30 %

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	))
=	214.527	-	25.817	-	( 54.149	-	max(0, 82.77	-	136.847	+	54.149	))
=	134.633

	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	))
=	296.737	-	145.362	-	( 37.969	-	max(0, 180.22	-	263.73	+	37.969	))
=	113.406

World-Link Logistics (Asia) Holding'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 )
=	28.412 * ( 1 - 18.56% )	/	( (124.597	+	113.406)	/ 2 )
=	23.1387328	/	119.0015
=	19.44 %

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	))
=	192.022	-	24.901	-	( 42.524	-	max(0, 75.416	-	134.792	+	42.524	))
=	124.597

	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	))
=	296.737	-	145.362	-	( 37.969	-	max(0, 180.22	-	263.73	+	37.969	))
=	113.406

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

World-Link Logistics (Asia) Holding (HKSE:06083) 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, World-Link Logistics (Asia) Holding's WACC % is 5.06%. World-Link Logistics (Asia) Holding's ROC % is 16.28% (calculated using TTM income statement data). World-Link Logistics (Asia) 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.

World-Link Logistics (Asia) Holding ROC % Related Terms

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World-Link Logistics (Asia) Holding (HKSE:06083) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » World-Link Logistics (Asia) Holding Ltd (HKSE:06083) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

150-164 Texaco Road, 3rd Floor, Allied Cargo Centre, Tsuen Wan, Hong Kong, HKG

Website

https://www.world-linkasia.com

World-Link Logistics (Asia) Holding Ltd is an investment holding company. Through its subsidiaries, the company is principally engaged in providing logistics services, packing services and distribution business. The organization offers total supply chain services, warehousing, transportation, data management, and customization services such as repacking and labeling services, and value-added services. The operating segments of the group are Logistics solutions business, Customizations services, and Distribution business. It generates maximum revenue from the logistics solutions business. All the business operations of the company are located in Hong Kong and Macau.

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