PZ Cussons (LSE:PZC) ROC % : -13.11% (As of Nov. 2023)

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What is PZ Cussons 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 %. PZ Cussons's annualized return on capital (ROC %) for the quarter that ended in Nov. 2023 was -13.11%.

As of today (2024-05-16), PZ Cussons's WACC % is 7.96%. PZ Cussons's ROC % is -1.69% (calculated using TTM income statement data). PZ Cussons earns returns that do not match up to its cost of capital. It will destroy value as it grows.

PZ Cussons ROC % Historical Data

The historical data trend for PZ Cussons'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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PZ Cussons ROC % Chart

PZ Cussons Annual Data

Trend

May14

May15

May16

May17

May18

May19

May20

May21

May22

May23

ROC %

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6.88

4.34

6.70

8.20

7.78

PZ Cussons Semi-Annual Data
	May14	Nov14	May15	Nov15	May16	Nov16	May17	Nov17	May18	Nov18	May19	Nov19	May20	Nov20	May21	Nov21	May22	Nov22	May23	Nov23
ROC %	Get a 7-Day Free Trial															9.35	8.15	7.32	8.67	-13.11

PZ Cussons ROC % Calculation

PZ Cussons's annualized Return on Capital (ROC %) for the fiscal year that ended in May. 2023 is calculated as:

	ROC % (A: May. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: May. 2022 )	+	Invested Capital (A: May. 2023 ))	/ count )
=	65.8 * ( 1 - 24.92% )	/	( (664.1	+	605.7)	/ 2 )
=	49.40264	/	634.9
=	7.78 %

where

	Invested Capital		(A: May. 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	))
=	941.9	-	113.5	-	( 164.3	-	max(0, 195.7	-	387.8	+	164.3	))
=	664.1

	Invested Capital		(A: May. 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	))
=	988.4	-	125.8	-	( 256.9	-	max(0, 210.4	-	490.9	+	256.9	))
=	605.7

PZ Cussons's annualized Return on Capital (ROC %) for the quarter that ended in Nov. 2023 is calculated as:

	ROC % (Q: Nov. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: May. 2023 )	+	Invested Capital (Q: Nov. 2023 ))	/ count )
=	-98.8 * ( 1 - 28.87% )	/	( (605.7	+	466)	/ 2 )
=	-70.27644	/	535.85
=	-13.11 %

where

	Invested Capital		(Q: May. 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	))
=	988.4	-	125.8	-	( 256.9	-	max(0, 210.4	-	490.9	+	256.9	))
=	605.7

	Invested Capital		(Q: Nov. 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	))
=	777.1	-	194.2	-	( 128.6	-	max(0, 204.1	-	321	+	128.6	))
=	466

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

PZ Cussons (LSE:PZC) 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, PZ Cussons's WACC % is 7.96%. PZ Cussons's ROC % is -1.69% (calculated using TTM income statement data). PZ Cussons 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.

PZ Cussons ROC % Related Terms

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PZ Cussons (LSE:PZC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » PZ Cussons PLC (LSE:PZC) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

PZCUY:USA PZCl:UK 1ZQ:Germany

Address

Manchester Business Park, 3500 Aviator Way, Manchester, GBR, M22 5TG

Website

https://www.pzcussons.com

PZ Cussons PLC is a household and personal-care company. Its main business categories are personal care and beauty, home care, food and nutrition, and electricals. Its key geographies are Africa (Ghana, Nigeria, and Kenya); Europe (the UK, Poland, and Greece); Asia (Australia, Thailand, and Indonesia); and the US The personal care and beauty segment offers shower gels, soaps, and haircare products under brands like Cussons Baby and Carex. Thu home care division offers dishwashers and laundry detergents under the Zip, Radiant, and Morning Fresh brands. The food and nutrition division provides organic yogurts, olive oil, and baby food under the Minerva and Rafferty's Garden brands. The electrical division offers electrical household items such as audiovisual products and air conditioners.