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Stelrad Group (LSE:SRAD) ROC % : 15.49% (As of Jun. 2024)


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What is Stelrad 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 %. Stelrad Group's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 15.49%.

As of today (2024-12-12), Stelrad Group's WACC % is 6.40%. Stelrad Group's ROC % is 16.36% (calculated using TTM income statement data). Stelrad Group 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.


Stelrad Group ROC % Historical Data

The historical data trend for Stelrad 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.

Stelrad Group ROC % Chart

Stelrad Group Annual Data
Trend Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROC %
Get a 7-Day Free Trial 9.23 16.28 37.10 10.32 16.58

Stelrad Group Semi-Annual Data
Dec18 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23 Jun24
ROC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only 4.49 12.85 15.47 17.66 15.49

Stelrad Group ROC % Calculation

Stelrad 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 )
=28.111 * ( 1 - 19.59% )/( (138.713 + 134.035)/ 2 )
=22.6040551/136.374
=16.58 %

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))
=262.397 - 101.043 - ( 22.641 - max(0, 103.483 - 161.224+22.641))
=138.713

Stelrad 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 )
=30.466 * ( 1 - 31.55% )/( (134.035 + 135.191)/ 2 )
=20.853977/134.613
=15.49 %

where

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

* 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.


Stelrad Group  (LSE:SRAD) 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, Stelrad Group's WACC % is 6.40%. Stelrad Group's ROC % is 16.36% (calculated using TTM income statement data). Stelrad Group 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.


Stelrad Group ROC % Related Terms

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Stelrad Group Business Description

Traded in Other Exchanges
N/A
Address
69-75 Side, Newcastle Upon Tyne, Tyne And Wear, GBR, NE1 3JE
Stelrad Group PLC sells standard and premium steel panel radiators, low surface temperature radiators, towel warmers, decorative steel tubular radiators, and other steel column radiators. It has manufacturing and distribution facilities in the United Kingdom, The Netherlands, and Turkey, additional distribution facilities in Poland and Denmark, and sales personnel in seven other countries, including China. Geographically, the company has three segments; UK & Ireland, Europe, and Turkey & International. The Group operates five established brands (Stelrad, Henrad, Termo Teknik, Hudevad, and Dl Radiators) that enable its products to be tailored to specific channels, maximizing market access and minimizing potential conflict.