Grand Fortune High Grade (LSE:GFHG) ROC % : -1,775.00% (As of Oct. 2023)

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What is Grand Fortune High Grade 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 %. Grand Fortune High Grade's annualized return on capital (ROC %) for the quarter that ended in Oct. 2023 was -1,775.00%.

As of today (2024-06-08), Grand Fortune High Grade's WACC % is 10.50%. Grand Fortune High Grade's ROC % is -1780.00% (calculated using TTM income statement data). Grand Fortune High Grade earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Grand Fortune High Grade ROC % Historical Data

The historical data trend for Grand Fortune High Grade'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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Grand Fortune High Grade ROC % Chart

Grand Fortune High Grade Annual Data

Trend

Apr18

Apr19

Apr20

Apr21

Apr22

Apr23

ROC %

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-2,266.67

-3,081.48

-2,514.29

-1,868.57

-1,246.67

Grand Fortune High Grade Semi-Annual Data
	Oct17	Apr18	Oct18	Apr19	Oct19	Apr20	Oct20	Apr21	Oct21	Apr22	Oct22	Apr23	Oct23
ROC %	Get a 7-Day Free Trial								-2,200.00	-1,620.00	-2,600.00	-1,432.00	-1,775.00

Grand Fortune High Grade ROC % Calculation

Grand Fortune High Grade's annualized Return on Capital (ROC %) for the fiscal year that ended in Apr. 2023 is calculated as:

	ROC % (A: Apr. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Apr. 2022 )	+	Invested Capital (A: Apr. 2023 ))	/ count )
=	-0.374 * ( 1 - 0% )	/	( (0.02	+	0.04)	/ 2 )
=	-0.374	/	0.03
=	-1,246.67 %

where

	Invested Capital		(A: Apr. 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	))
=	1.767	-	0.008	-	( 1.767	-	max(0, 0.028	-	1.767	+	1.767	))
=	0.02

	Invested Capital		(A: Apr. 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	))
=	1.426	-	0.007	-	( 1.426	-	max(0, 0.047	-	1.426	+	1.426	))
=	0.04

Grand Fortune High Grade's annualized Return on Capital (ROC %) for the quarter that ended in Oct. 2023 is calculated as:

	ROC % (Q: Oct. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Apr. 2023 )	+	Invested Capital (Q: Oct. 2023 ))	/ count )
=	-0.71 * ( 1 - 0% )	/	( (0.04	+	0.04)	/ 2 )
=	-0.71	/	0.04
=	-1,775.00 %

where

	Invested Capital		(Q: Apr. 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	))
=	1.426	-	0.007	-	( 1.426	-	max(0, 0.047	-	1.426	+	1.426	))
=	0.04

	Invested Capital		(Q: Oct. 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	))
=	1.093	-	0.01	-	( 1.093	-	max(0, 0.05	-	1.093	+	1.093	))
=	0.04

Note: The Operating Income data used here is two times the semi-annual (Oct. 2023) data.

Grand Fortune High Grade (LSE:GFHG) 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, Grand Fortune High Grade's WACC % is 10.50%. Grand Fortune High Grade's ROC % is -1780.00% (calculated using TTM income statement data). Grand Fortune High Grade 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.

Grand Fortune High Grade ROC % Related Terms

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Grand Fortune High Grade (LSE:GFHG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Education » Grand Fortune High Grade Ltd (LSE:GFHG) » Definitions » ROC %

Comparable Companies

BOM:501370 BOM:532019 OSTO:APRNDR HKSE:08417 HKSE:08160 BOM:533540 ISX:IDEA LEAI HKSE:08363 BOM:534312

Traded in Other Exchanges

N/A

Address

No. 2193 Guangyuan East, Room No. 1805, Times New World Center, Tianhe District, Guangdong Province, Guangzhou, CHN

Website

http://www.gf-hg.com

Grand Fortune High Grade Ltd provides financial training, corporate training, and professional qualification courses. The company is focused on development, by organic growth, it's a financial training business to satisfy the significant demand for financial sector specialists. The firm operates in a single segment namely the Development and operation of financial training courses in China.

Grand Fortune High Grade (LSE:GFHG) Headlines

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