Titon Holdings (LSE:TON) ROC % : -9.94% (As of Mar. 2024)

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What is Titon Holdings 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 %. Titon Holdings's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -9.94%.

As of today (2024-12-14), Titon Holdings's WACC % is 9.86%. Titon Holdings's ROC % is -6.75% (calculated using TTM income statement data). Titon Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Titon Holdings ROC % Historical Data

The historical data trend for Titon Holdings'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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Titon Holdings ROC % Chart

Titon Holdings Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

ROC %

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9.57

-1.90

7.70

-2.96

-3.99

Titon Holdings Semi-Annual Data
	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23	Mar24
ROC %	Get a 7-Day Free Trial															-2.69	-3.60	-4.47	-2.89	-9.94

Titon Holdings ROC % Calculation

Titon Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2023 is calculated as:

	ROC % (A: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2022 )	+	Invested Capital (A: Sep. 2023 ))	/ count )
=	-0.537 * ( 1 - -10.25% )	/	( (15.757	+	13.9)	/ 2 )
=	-0.5920425	/	14.8285
=	-3.99 %

where

	Invested Capital		(A: Sep. 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	))
=	21.612	-	4.129	-	( 1.726	-	max(0, 5.283	-	13.217	+	1.726	))
=	15.757

	Invested Capital		(A: 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	))
=	19.364	-	3.226	-	( 2.238	-	max(0, 4.174	-	12.131	+	2.238	))
=	13.9

Titon Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-1.356 * ( 1 - 3.93% )	/	( (13.9	+	12.314)	/ 2 )
=	-1.3027092	/	13.107
=	-9.94 %

where

	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	))
=	19.364	-	3.226	-	( 2.238	-	max(0, 4.174	-	12.131	+	2.238	))
=	13.9

	Invested Capital		(Q: Mar. 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	))
=	18.249	-	3.703	-	( 2.232	-	max(0, 3.863	-	11.296	+	2.232	))
=	12.314

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

Titon Holdings (LSE:TON) 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, Titon Holdings's WACC % is 9.86%. Titon Holdings's ROC % is -6.75% (calculated using TTM income statement data). Titon Holdings 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.

Titon Holdings ROC % Related Terms

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Titon Holdings Business Description

Industry

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Address

894 The Crescent, Colchester Business Park, Colchester, Essex, GBR, CO4 9YQ

Website

https://www.titon.com

Titon Holdings PLC is a UK-based company. Its core business is to design, manufacture, and market ventilation products and door and window fittings. It is engaged in the manufacturing and sale of passive and powered ventilation products to house builders, distributors, construction companies, electrical contractors, and window, and door manufacturers. In addition, it acts as a supplier of window handles, hinges, and locking mechanisms to door and window manufacturing customers. The company has four geographic segments namely the United Kingdom, South Korea, North America, and all other countries. The majority of the company's revenue comes from the United Kingdom.

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