KGHPF (KGHM Polska Miedz) ROC % : 4.08% (As of Sep. 2024)

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What is KGHM Polska Miedz 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 %. KGHM Polska Miedz's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 4.08%.

As of today (2024-12-15), KGHM Polska Miedz's WACC % is 10.30%. KGHM Polska Miedz's ROC % is 0.81% (calculated using TTM income statement data). KGHM Polska Miedz earns returns that do not match up to its cost of capital. It will destroy value as it grows.

KGHM Polska Miedz ROC % Historical Data

The historical data trend for KGHM Polska Miedz'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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KGHM Polska Miedz ROC % Chart

KGHM Polska Miedz Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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4.68

5.68

9.52

7.32

-3.26

KGHM Polska Miedz 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															1.23	-19.51	3.14	7.18	4.08

KGHM Polska Miedz ROC % Calculation

KGHM Polska Miedz'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 )
=	-355.135 * ( 1 - -2.53% )	/	( (11784.211	+	10552.816)	/ 2 )
=	-364.1199155	/	11168.5135
=	-3.26 %

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	))
=	13162.143	-	1087.076	-	( 290.856	-	max(0, 2262.074	-	3217.637	+	290.856	))
=	11784.211

	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	))
=	12654.562	-	1682.579	-	( 419.167	-	max(0, 2861.025	-	3300.633	+	419.167	))
=	10552.816

KGHM Polska Miedz'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 )
=	814.692 * ( 1 - 45.33% )	/	( (10934.303	+	10917.309)	/ 2 )
=	445.3921164	/	10925.806
=	4.08 %

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	))
=	13111.656	-	1844.877	-	( 665.446	-	max(0, 3098.931	-	3431.407	+	665.446	))
=	10934.303

	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	))
=	12756.521	-	1541.707	-	( 339.373	-	max(0, 2720.153	-	3017.658	+	339.373	))
=	10917.309

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

KGHM Polska Miedz (OTCPK:KGHPF) 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, KGHM Polska Miedz's WACC % is 10.30%. KGHM Polska Miedz's ROC % is 0.81% (calculated using TTM income statement data). KGHM Polska Miedz 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.

KGHM Polska Miedz ROC % Related Terms

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KGHM Polska Miedz Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » KGHM Polska Miedz SA (OTCPK:KGHPF) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

KGH:Poland 0O8D:UK KGHA:Germany KGH:Czech Republic

Address

48 M.Sklodowskiej-Curie Street, Lubin, POL, 59-301

Website

https://www.kghm.com

KGHM Polska Miedz SA engages in copper ore mining and copper production predominantly in South-Western Poland. The company also produces precious metals such as silver, which is typically used for coins, jewelry, photography products, and industrial purposes. The bulk of group revenue is generated through copper sales, and the remainder is through sales of silver, while a minor portion is generated through the production of gold, salt, and casting of light metals. The materials are sold domestically, and exported to Germany, China, the U.S., the United Kingdom, and the Czech Republic, among many other European nations.