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Legal & General Group (Legal & General Group) ROC % : 0.02% (As of Dec. 2023)


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What is Legal & General 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 %. Legal & General Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 0.02%.

As of today (2024-04-30), Legal & General Group's WACC % is 10.58%. Legal & General Group's ROC % is 0.50% (calculated using TTM income statement data). Legal & General Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Legal & General Group ROC % Historical Data

The historical data trend for Legal & General 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.

* Premium members only.

Legal & General Group ROC % Chart

Legal & General Group Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 0.40 0.28 0.43 0.21 0.51

Legal & General Group Semi-Annual Data
Jun14 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 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.41 0.27 0.16 0.20 0.02

Legal & General Group ROC % Calculation

Legal & General Group'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
=EBIT * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2022 ) + Invested Capital (A: Dec. 2023 ))/ count )
=535.443 * ( 1 - -482.89% )/( (575724.7867 + 637122.975)/ 2 )
=3121.0437027/606423.88085
=0.51 %

where

Invested Capital(A: Dec. 2022 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=625176.614 - 84.044 - ( 43585.871 - 5% * -115638.246 )
=575724.7867

Invested Capital(A: Dec. 2023 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=660879.747 - 97.468 - ( 25965.823 - 5% * 46130.38 )
=637122.975

Legal & General Group'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
=EBIT * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2023 ) + Invested Capital (Q: Dec. 2023 ))/ count )
=-187.342 * ( 1 - 153.63% )/( (613209.84815 + 636494.8737)/ 2 )
=100.4715146/624852.360925
=0.02 %

where

Invested Capital(Q: Jun. 2023 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=631023.99 - 85.859 - ( 18354.798 - 5% * 12530.303 )
=613209.84815

Invested Capital(Q: Dec. 2023 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=660879.747 - 97.468 - ( 25965.823 - 5% * 33568.354 )
=636494.8737

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

* 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.

Legal & General Group  (OTCPK:LGGNY) 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, Legal & General Group's WACC % is 10.58%. Legal & General Group's ROC % is 0.50% (calculated using TTM income statement data). Legal & General 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.

Legal & General Group ROC % Related Terms

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Legal & General Group (Legal & General Group) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Legal & General Group PLC (OTCPK:LGGNY) » Definitions » ROC %
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LSE:SMT LSE:ICG LSE:SDR LSE:FCIT LSE:MNG LSE:HL. LSE:PCT LSE:ATST LSE:UKW LSE:3IN BLK BX KKR OSTO:INVE A APO TSX:BN BK AMP LSE:III XSWX:PGHN
Traded in Other Exchanges
LGGNF:USA LGENl:UK LGEN:UK LGI:Germany
Address
One Coleman Street, London, GBR, EC2R 5AA
Website
https://www.legalandgeneralgroup.com
Legal & General Group PLC operates across four broad business areas of retirement, investment management, capital investment, and insurance. The retirement business provides provide guaranteed retirement income for corporate pension scheme members. Investment Management business provides investment management services for both individuals and corporations, including managing pension funds. Capital investment use customers' pension assets, as well as the group's shareholder capital, to make long-term investments in assets such as clean energy, housing, and SME finance. The Insurance business provides various types of insurance, including life and disability insurance. The company has a global presence but most of its assets under management are derived from the United Kingdom and Europe.