Merit Group (LSE:MRIT) ROC % : 2.63% (As of Sep. 2023)

View and export this data going back to 2003. Start your Free Trial

What is Merit 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 %. Merit Group's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was 2.63%.

As of today (2024-05-23), Merit Group's WACC % is 6.21%. Merit Group's ROC % is -4.63% (calculated using TTM income statement data). Merit Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Merit Group ROC % Historical Data

The historical data trend for Merit 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.

Merit Group ROC % Chart

Merit Group Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROC %

Get a 7-Day Free Trial

-4.34

0.25

-4.44

-2.55

-6.78

Merit Group Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
ROC %	Get a 7-Day Free Trial															0.28	-5.72	-3.60	-11.63	2.63

Merit Group ROC % Calculation

Merit Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	-3.66 * ( 1 - 2.41% )	/	( (58.466	+	46.903)	/ 2 )
=	-3.571794	/	52.6845
=	-6.78 %

where

	Invested Capital		(A: Mar. 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	))
=	55.505	-	3.272	-	( 2.321	-	max(0, 14.342	-	8.109	+	2.321	))
=	58.466

	Invested Capital		(A: Mar. 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	))
=	45.322	-	1.548	-	( 2.144	-	max(0, 10.775	-	7.646	+	2.144	))
=	46.903

Merit Group's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	1.736 * ( 1 - 33.27% )	/	( (46.903	+	41.306)	/ 2 )
=	1.1584328	/	44.1045
=	2.63 %

where

	Invested Capital		(Q: Mar. 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	))
=	45.322	-	1.548	-	( 2.144	-	max(0, 10.775	-	7.646	+	2.144	))
=	46.903

	Invested Capital		(Q: Sep. 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	))
=	44.294	-	6.085	-	( 1.069	-	max(0, 9.669	-	6.572	+	1.069	))
=	41.306

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

Merit Group (LSE:MRIT) 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, Merit Group's WACC % is 6.21%. Merit Group's ROC % is -4.63% (calculated using TTM income statement data). Merit 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.

Merit Group ROC % Related Terms

Thank you for viewing the detailed overview of Merit Group's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Merit Group (LSE:MRIT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Merit Group PLC (LSE:MRIT) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

32 London Bridge Street, 9th Floor, The Shard, London, GBR, SE1 9SG

Website

https://www.meritgroupplc.com

Merit Group PLC provides data, business, and political intelligence. The group operates through two operating segments namely, Dods and Merit Data and Technology. Dods business segment concentrates on the provision of key information and insights into the political and public policy environments around the UK and the European Union. The Merit Data and Technology segment focuses on the fields of data engineering, machine learning, and artificial intelligence. The company generates the majority of its revenue from Merit Data & Technology segment.

Merit Group (LSE:MRIT) Headlines

No Headlines