PT Indofood Sukses Makmur Tbk (ISX:INDF) ROC % : 10.63% (As of Sep. 2024)

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What is PT Indofood Sukses Makmur Tbk 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 %. PT Indofood Sukses Makmur Tbk's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 10.63%.

As of today (2024-12-15), PT Indofood Sukses Makmur Tbk's WACC % is 4.48%. PT Indofood Sukses Makmur Tbk's ROC % is 11.04% (calculated using TTM income statement data). PT Indofood Sukses Makmur Tbk 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.

PT Indofood Sukses Makmur Tbk ROC % Historical Data

The historical data trend for PT Indofood Sukses Makmur Tbk'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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PT Indofood Sukses Makmur Tbk ROC % Chart

PT Indofood Sukses Makmur Tbk Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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7.98

8.05

9.04

9.32

10.09

PT Indofood Sukses Makmur Tbk 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															9.82	9.16	13.15	10.18	10.63

PT Indofood Sukses Makmur Tbk ROC % Calculation

PT Indofood Sukses Makmur Tbk'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 )
=	20144409 * ( 1 - 26.39% )	/	( (147125713	+	146825589)	/ 2 )
=	14828299.4649	/	146975651
=	10.09 %

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	))
=	180433300	-	9156861	-	( 26922050	-	max(0, 30725942	-	54876668	+	26922050	))
=	147125713

	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	))
=	186587957	-	9575075	-	( 36689357	-	max(0, 32914504	-	63101797	+	36689357	))
=	146825589

PT Indofood Sukses Makmur Tbk'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 )
=	21039008 * ( 1 - 23% )	/	( (155643720	+	149021124)	/ 2 )
=	16200036.16	/	152332422
=	10.63 %

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	))
=	201184011	-	11840434	-	( 45568506	-	max(0, 42877202	-	76577059	+	45568506	))
=	155643720

	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	))
=	195486775	-	10287174	-	( 40627899	-	max(0, 35698807	-	71877284	+	40627899	))
=	149021124

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

PT Indofood Sukses Makmur Tbk (ISX:INDF) 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, PT Indofood Sukses Makmur Tbk's WACC % is 4.48%. PT Indofood Sukses Makmur Tbk's ROC % is 11.04% (calculated using TTM income statement data). PT Indofood Sukses Makmur Tbk 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.

PT Indofood Sukses Makmur Tbk ROC % Related Terms

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PT Indofood Sukses Makmur Tbk Business Description

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Address

Jalan Jend. Sudirman Kav 76-78, Sudirman Plaza, Indofood Tower, 27th Floor, Jakarta, IDN, 12910

Website

https://www.indofood.com

PT Indofood Sukses Makmur Tbk is an Indonesian packaged food company. Its portfolio is diversified with operations in both raw materials and processed food. The company divides its operations into the consumer branded products business Group, Bogasari Business Group, Agribusiness Group, and Distribution Business Group. The consumer branded products segment produces a varied range of consumer-branded products such as noodles, dairy, snack foods, special foods, food seasonings, and beverages. Nutrition & Special Foods. The agribusiness operations are research, development, production, and marketing of branded cooking oils, margarine and shortening, processes rubber, sugar cane, and other crops. The Distribution segment distributes consumer products.