Finet Group (HKSE:08317) ROC % : -15.54% (As of Sep. 2023)

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What is Finet Group 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 %. Finet Group's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was -15.54%.

As of today (2024-06-04), Finet Group's WACC % is 2.74%. Finet Group's ROC % is -18.33% (calculated using TTM income statement data). Finet Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Finet Group ROC % Historical Data

The historical data trend for Finet Group'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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Finet Group ROC % Chart

Finet Group Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROC %

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-23.85

-20.78

-17.84

-11.86

-15.26

Finet Group Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23
ROC %	Get a 7-Day Free Trial															-14.41	-41.38	-5.90	-13.27	-15.54

Finet Group ROC % Calculation

Finet Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	-9.089 * ( 1 - 7.65% )	/	( (58.341	+	51.634)	/ 2 )
=	-8.3936915	/	54.9875
=	-15.26 %

where

	Invested Capital		(A: Mar. 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	))
=	68.15	-	2.362	-	( 17.584	-	max(0, 22.876	-	30.323	+	17.584	))
=	58.341

	Invested Capital		(A: Mar. 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	))
=	62.1	-	2.444	-	( 8.022	-	max(0, 11.307	-	30.114	+	8.022	))
=	51.634

Finet Group's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-8.212 * ( 1 - 0% )	/	( (0	+	52.86)	/ 1 )
=	-8.212	/	52.86
=	-15.54 %

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	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

	Invested Capital		(Q: Sep. 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	))
=	66.846	-	2.447	-	( 11.539	-	max(0, 10.009	-	36.868	+	11.539	))
=	52.86

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) data.

Finet Group (HKSE:08317) 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, Finet Group's WACC % is 2.74%. Finet Group's ROC % is -18.33% (calculated using TTM income statement data). Finet Group 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.

Finet Group ROC % Related Terms

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Finet Group (HKSE:08317) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Finet Group Ltd (HKSE:08317) » Definitions » ROC %

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Address

77-79 Gloucester Road, 30th Floor, Fortis Tower, Wanchai, Hong Kong, HKG

Website

http://ir.finet.hk/en

Finet Group Ltd is an investment holding company. The company has four business segments namely Financial Information, Advertising and Investor Relationship Service Business; Securities and Futures Business; Money Lending Business; and Property Investment Business. The Financial Information, Advertising and Investor Relationship Service Business segment involves in the development, production, and provision of financial information services and technology solutions to investors, corporate and retail clients. The Securities and Futures segment specializes in the provision of online securities and futures trading. The Money Lending Business segment engages in lending. The Property Investment segment involves in the real estate business.

Executives

Lo Yuk Yee	2101 Beneficial owner
Maxx Capital International Limited	2101 Beneficial owner
Pablos International Limited	2201 Interest of corporation controlled by you
Broadgain International Limited	2101 Beneficial owner
Lo Yuk Yee
Wang Yuan	2101 Beneficial owner

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