Johnson Service Group (LSE:JSG) ROC % : 6.54% (As of Jun. 2024)

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What is Johnson Service 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 %. Johnson Service Group's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 6.54%.

As of today (2024-12-13), Johnson Service Group's WACC % is 12.92%. Johnson Service Group's ROC % is 8.56% (calculated using TTM income statement data). Johnson Service Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Johnson Service Group ROC % Historical Data

The historical data trend for Johnson Service 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.

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Johnson Service Group ROC % Chart

Johnson Service Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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8.84

-4.88

0.59

8.06

7.52

Johnson Service Group Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															1.29	15.44	5.19	10.34	6.54

Johnson Service Group ROC % Calculation

Johnson Service 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
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	45.2 * ( 1 - 27.66% )	/	( (403.5	+	465.7)	/ 2 )
=	32.69768	/	434.6
=	7.52 %

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	))
=	433.5	-	48.2	-	( 6.1	-	max(0, 91.6	-	73.4	+	6.1	))
=	403.5

	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	))
=	509	-	57.2	-	( 9.6	-	max(0, 112.6	-	98.7	+	9.6	))
=	465.7

Johnson Service Group's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	40.2 * ( 1 - 26.2% )	/	( (465.7	+	441.3)	/ 2 )
=	29.6676	/	453.5
=	6.54 %

where

	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	))
=	509	-	57.2	-	( 9.6	-	max(0, 112.6	-	98.7	+	9.6	))
=	465.7

	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	))
=	529.4	-	88.4	-	( 10	-	max(0, 101	-	100.7	+	10	))
=	441.3

Note: The Operating Income data used here is two times the semi-annual (Jun. 2024) data.

Johnson Service Group (LSE:JSG) 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, Johnson Service Group's WACC % is 12.92%. Johnson Service Group's ROC % is 8.56% (calculated using TTM income statement data). Johnson Service 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.

Johnson Service Group ROC % Related Terms

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Johnson Service Group Business Description

Industry

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JSG.GB:UK

Address

Johnson House, Abbots Park, Monks Way, Preston Brook, Cheshire, GBR, WA7 3GH

Website

https://www.jsg.com

Johnson Service Group PLC United Kingdom-based company that provides textile-related services to businesses and consumers. It is a supplier of work wear and protective wear, offering these services through Johnsons Workwear brand. The company also provides premium linen services for the hotel, catering and hospitality markets, and high volume hotel linen services, through a number of different brands which include Johnsons Hotel Linen, Johnsons Hotel, Restaurant & Catering Linen, Johnsons Restaurant & Catering Linen and Regency. It has two reporting segments; Workwear, and Hotel, Restaurant and Catering which is also its key revenue generating segment.

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