HLLGY (HELLA GmbH KGaA) ROC % : 6.03% (As of Sep. 2024)

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What is HELLA GmbH KGaA 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 %. HELLA GmbH KGaA's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 6.03%.

As of today (2024-12-11), HELLA GmbH KGaA's WACC % is 4.13%. HELLA GmbH KGaA's ROC % is 5.64% (calculated using TTM income statement data). HELLA GmbH KGaA 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.

HELLA GmbH KGaA ROC % Historical Data

The historical data trend for HELLA GmbH KGaA'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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HELLA GmbH KGaA ROC % Chart

HELLA GmbH KGaA Annual Data

Trend

May14

May15

May16

May17

May18

May19

May20

May21

May22

Dec23

ROC %

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9.43

4.95

7.82

3.54

6.75

HELLA GmbH KGaA Quarterly Data
	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															6.24	4.76	6.66	3.41	6.03

HELLA GmbH KGaA ROC % Calculation

HELLA GmbH KGaA'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: May. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	475.415 * ( 1 - 32.91% )	/	( (4537.184	+	4915.365)	/ 2 )
=	318.9559235	/	4726.2745
=	6.75 %

where

	Invested Capital		(A: May. 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	))
=	6812.868	-	1228.445	-	( 1047.239	-	max(0, 2155.539	-	3708.848	+	1047.239	))
=	4537.184

	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	))
=	7700.811	-	1612.786	-	( 1302.463	-	max(0, 2924.296	-	4096.956	+	1302.463	))
=	4915.365

HELLA GmbH KGaA'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 )
=	350.572 * ( 1 - 14.76% )	/	( (4827.708	+	5078.405)	/ 2 )
=	298.8275728	/	4953.0565
=	6.03 %

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	))
=	8062.616	-	1776.809	-	( 1465.098	-	max(0, 2951.786	-	4409.885	+	1465.098	))
=	4827.708

	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	))
=	8107.541	-	1671.723	-	( 1357.413	-	max(0, 2848.605	-	4360.642	+	1357.413	))
=	5078.405

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

HELLA GmbH KGaA (OTCPK:HLLGY) 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, HELLA GmbH KGaA's WACC % is 4.13%. HELLA GmbH KGaA's ROC % is 5.64% (calculated using TTM income statement data). HELLA GmbH KGaA 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.

HELLA GmbH KGaA ROC % Related Terms

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HELLA GmbH KGaA Business Description

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GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » HELLA GmbH & Co KGaA (OTCPK:HLLGY) » Definitions » ROC %

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0R3U:UK HLE:Germany

Address

Rixbecker Strasse 75, Lippstadt, NW, DEU, 59552

Website

https://www.hella.com

HELLA GmbH & Co KGaA is a manufacturer of lighting and electronic components and systems for the automotive industry. The company also produces complete vehicle modules, air-conditioning systems, and vehicle electrical systems in its joint-venture companies, as well as products for specialist vehicles. Further, Hella operates a trade organisation for automotive parts, accessories, diagnosis, and services in Europe. The company is controlled through a pooled family majority shareholding in the group. The company has three reportable segments which are Lighting, Electronics and Lifecycle Solutions. The company generates majority of the revenue from Lighting segment.