Luz Del SurA (LIM:LUSURC1) ROC % : 9.02% (As of Dec. 2023)

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What is Luz Del SurA 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 %. Luz Del SurA's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 9.02%.

As of today (2025-03-14), Luz Del SurA's WACC % is 8.48%. Luz Del SurA's ROC % is 9.02% (calculated using TTM income statement data). Luz Del SurA 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.

Luz Del SurA ROC % Historical Data

The historical data trend for Luz Del SurA'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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Luz Del SurA ROC % Chart

Luz Del SurA Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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9.95

7.30

7.64

8.40

9.02

Luz Del SurA Semi-Annual Data
	Dec05	Dec06	Dec07	Dec08	Dec09	Dec10	Dec11	Dec12	Dec13	Dec14	Dec15	Dec16	Dec17	Dec18	Dec19	Dec20	Dec21	Dec22	Dec23
ROC %	Get a 7-Day Free Trial														9.95	7.30	7.64	8.40	9.02

Luz Del SurA ROC % Calculation

Luz Del SurA'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 )
=	1199.783 * ( 1 - 29.43% )	/	( (8801.059	+	9981.456)	/ 2 )
=	846.6868631	/	9391.2575
=	9.02 %

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	))
=	7852.802	-	541.087	-	( 45.453	-	max(0, 2293.435	-	804.091	+	45.453	))
=	8801.059

	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	))
=	8784.062	-	499.689	-	( 319.387	-	max(0, 2728.351	-	1031.268	+	319.387	))
=	9981.456

Luz Del SurA'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
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2022 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	1199.783 * ( 1 - 29.43% )	/	( (8801.059	+	9981.456)	/ 2 )
=	846.6868631	/	9391.2575
=	9.02 %

where

	Invested Capital		(Q: 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	))
=	7852.802	-	541.087	-	( 45.453	-	max(0, 2293.435	-	804.091	+	45.453	))
=	8801.059

	Invested Capital		(Q: 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	))
=	8784.062	-	499.689	-	( 319.387	-	max(0, 2728.351	-	1031.268	+	319.387	))
=	9981.456

Note: The Operating Income data used here is one times the annual (Dec. 2023) data.

Luz Del SurA (LIM:LUSURC1) 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, Luz Del SurA's WACC % is 8.48%. Luz Del SurA's ROC % is 9.02% (calculated using TTM income statement data). Luz Del SurA 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.

Luz Del SurA ROC % Related Terms

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Luz Del SurA Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » Luz Del Sur SAA (LIM:LUSURC1) » Definitions » ROC %

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Address

Av Canaval y Moreyra 380, Piso 17, San Isidro, Lima, PER

Website

http://www.luzdelsur.com.pe

Luz Del Sur SAA is a Peru-based electric power distribution company which provides service to approximately 900 thousand clients. The company also provides other services such as maintenance of internal installations and electrical networks, as well as energy diagnoses. It also focuses on expansion and improvement of the electrical grid, construction of transmission and distribution substations, and purchase of machinery and equipment.

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