Trainline (LSE:TRN) ROC % : 6.11% (As of Aug. 2023)

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What is Trainline 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 %. Trainline's annualized return on capital (ROC %) for the quarter that ended in Aug. 2023 was 6.11%.

As of today (2024-05-06), Trainline's WACC % is 12.89%. Trainline's ROC % is 5.22% (calculated using TTM income statement data). Trainline earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Trainline ROC % Historical Data

The historical data trend for Trainline'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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Trainline ROC % Chart

Trainline Annual Data

Trend

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

ROC %

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1.76

0.38

-14.95

-1.42

4.65

Trainline Semi-Annual Data
	Feb17	Feb18	Aug18	Feb19	Aug19	Feb20	Aug20	Feb21	Aug21	Feb22	Aug22	Feb23	Aug23
ROC %	Get a 7-Day Free Trial								-2.65	-0.36	5.47	4.21	6.11

Trainline ROC % Calculation

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

	ROC % (A: Feb. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Feb. 2022 )	+	Invested Capital (A: Feb. 2023 ))	/ count )
=	27.639 * ( 1 - 3.95% )	/	( (563.778	+	577.344)	/ 2 )
=	26.5472595	/	570.561
=	4.65 %

where

	Invested Capital		(A: Feb. 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	))
=	643.005	-	193.461	-	( 68.496	-	max(0, 232.643	-	118.409	+	68.496	))
=	563.778

	Invested Capital		(A: Feb. 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	))
=	653.171	-	171.067	-	( 57.337	-	max(0, 212.735	-	117.495	+	57.337	))
=	577.344

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

	ROC % (Q: Aug. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Feb. 2023 )	+	Invested Capital (Q: Aug. 2023 ))	/ count )
=	45.274 * ( 1 - 24.76% )	/	( (577.344	+	537.631)	/ 2 )
=	34.0641576	/	557.4875
=	6.11 %

where

	Invested Capital		(Q: Feb. 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	))
=	653.171	-	171.067	-	( 57.337	-	max(0, 212.735	-	117.495	+	57.337	))
=	577.344

	Invested Capital		(Q: Aug. 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	))
=	705.676	-	238.296	-	( 119.331	-	max(0, 243.41	-	173.159	+	119.331	))
=	537.631

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

Trainline (LSE:TRN) 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, Trainline's WACC % is 12.89%. Trainline's ROC % is 5.22% (calculated using TTM income statement data). Trainline 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.

Trainline ROC % Related Terms

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Trainline (LSE:TRN) Business Description

Industry

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TNLIF:USA TRNl:UK 2T9A:Germany

Address

120 Holborn, 3rd Floor, London, GBR, EC1N 2TD

Website

https://www.thetrainline.com

Trainline PLC is an independent rail and coach travel platform selling rail and coach tickets to millions of travellers worldwide, enabling them to seamlessly search, book and manage their journeys all in one place via its website and mobile app. The company's segment includes UK Consumer; International Consumer and Trainline Solutions. It generates maximum revenue from the UK Consumer segment.