OVS SpA (MIL:OVS) ROC % : 3.44% (As of Jul. 2024)

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What is OVS SpA 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 %. OVS SpA's annualized return on capital (ROC %) for the quarter that ended in Jul. 2024 was 3.44%.

As of today (2024-12-11), OVS SpA's WACC % is 5.93%. OVS SpA's ROC % is 3.99% (calculated using TTM income statement data). OVS SpA earns returns that do not match up to its cost of capital. It will destroy value as it grows.

OVS SpA ROC % Historical Data

The historical data trend for OVS SpA'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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OVS SpA ROC % Chart

OVS SpA Annual Data

Trend

Jan15

Jan16

Jan17

Jan18

Jan19

Jan20

Jan21

Jan22

Jan23

Jan24

ROC %

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3.85

0.23

3.06

2.73

3.98

OVS SpA Semi-Annual Data
	Jan15	Jul15	Jan16	Jul16	Jan17	Jul17	Jan18	Jul18	Jan19	Jul19	Jan20	Jul20	Jan21	Jul21	Jan22	Jul22	Jan23	Jul23	Jan24	Jul24
ROC %	Get a 7-Day Free Trial															2.06	3.64	3.34	4.59	3.44

OVS SpA ROC % Calculation

OVS SpA's annualized Return on Capital (ROC %) for the fiscal year that ended in Jan. 2024 is calculated as:

	ROC % (A: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jan. 2023 )	+	Invested Capital (A: Jan. 2024 ))	/ count )
=	130.588 * ( 1 - 27.56% )	/	( (2403.558	+	2352.432)	/ 2 )
=	94.5979472	/	2377.995
=	3.98 %

where

	Invested Capital		(A: Jan. 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	))
=	2871.01	-	489.658	-	( 106.019	-	max(0, 765.077	-	742.871	+	106.019	))
=	2403.558

	Invested Capital		(A: Jan. 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	))
=	2823.087	-	503.469	-	( 105.79	-	max(0, 742.428	-	709.614	+	105.79	))
=	2352.432

OVS SpA's annualized Return on Capital (ROC %) for the quarter that ended in Jul. 2024 is calculated as:

	ROC % (Q: Jul. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jan. 2024 )	+	Invested Capital (Q: Jul. 2024 ))	/ count )
=	125.19 * ( 1 - 33.31% )	/	( (2352.432	+	2496.557)	/ 2 )
=	83.489211	/	2424.4945
=	3.44 %

where

	Invested Capital		(Q: Jan. 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	))
=	2823.087	-	503.469	-	( 105.79	-	max(0, 742.428	-	709.614	+	105.79	))
=	2352.432

	Invested Capital		(Q: Jul. 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	))
=	2887.78	-	477.194	-	( 91.549	-	max(0, 821.681	-	735.71	+	91.549	))
=	2496.557

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

OVS SpA (MIL:OVS) 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, OVS SpA's WACC % is 5.93%. OVS SpA's ROC % is 3.99% (calculated using TTM income statement data). OVS SpA 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.

OVS SpA ROC % Related Terms

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OVS SpA Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » OVS SpA (MIL:OVS) » Definitions » ROC %

Comparable Companies

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OVSm:UK 0R5R:UK 0OV1:Germany

Address

Via Terraglio 17, Venice - Mestre, ITA, 30174

Website

http://www.ovscorporate.it

OVS SpA is an Italian fashion retailer. The company develops and markets menswear, womenswear and children's wear. Its operating segment includes OVS, UPIM and Sempione Fashion. OVS segment offers stylish and high-quality clothing at competitive prices focusing on the latest trends and fashion. Its UPIM segment offers women's, men's and children's clothing products, homeware and fragrance, The company generates maximum revenue from the OVS segment. Geographically, it has a presence in Italy, Bangladesh, China, Hong Kong, India, Pakistan, Turkey, Spain, Croatia, and Serbia.