ARC Real Estate Spa (MIL:YARC) ROC % : 1.79% (As of Jun. 2014)

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What is ARC Real Estate 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 %. ARC Real Estate Spa's annualized return on capital (ROC %) for the quarter that ended in Jun. 2014 was 1.79%.

As of today (2024-06-20), ARC Real Estate Spa's WACC % is 2.13%. ARC Real Estate Spa's ROC % is -0.29% (calculated using TTM income statement data). ARC Real Estate Spa earns returns that do not match up to its cost of capital. It will destroy value as it grows.

ARC Real Estate Spa ROC % Historical Data

The historical data trend for ARC Real Estate 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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ARC Real Estate Spa ROC % Chart

ARC Real Estate Spa Annual Data

Trend

Dec11

Dec12

Dec13

ROC %

-2.49

2.89

1.92

ARC Real Estate Spa Quarterly Data
	Jun12	Dec12	Mar13	Jun13	Sep13	Dec13	Jun14
ROC %	Get a 7-Day Free Trial			5.85	16.00	-12.50	6.93	1.79

ARC Real Estate Spa ROC % Calculation

ARC Real Estate Spa's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2013 is calculated as:

	ROC % (A: Dec. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2012 )	+	Invested Capital (A: Dec. 2013 ))	/ count )
=	0.13 * ( 1 - 50.77% )	/	( (2.941	+	3.721)	/ 2 )
=	0.063999	/	3.331
=	1.92 %

where

	Invested Capital		(A: Dec. 2012 )
=	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	))
=	3.759	-	0.808	-	( 0.216	-	max(0, 1.587	-	1.597	+	0.216	))
=	2.941

	Invested Capital		(A: Dec. 2013 )
=	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	))
=	4.253	-	1.134	-	( 0.034	-	max(0, 1.944	-	1.342	+	0.034	))
=	3.721

ARC Real Estate Spa's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2014 is calculated as:

	ROC % (Q: Jun. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2013 )	+	Invested Capital (Q: Jun. 2014 ))	/ count )
=	0.06 * ( 1 - 0% )	/	( (3.721	+	2.986)	/ 2 )
=	0.06	/	3.3535
=	1.79 %

where

	Invested Capital		(Q: Dec. 2013 )
=	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	))
=	4.253	-	1.134	-	( 0.034	-	max(0, 1.944	-	1.342	+	0.034	))
=	3.721

	Invested Capital		(Q: Jun. 2014 )
=	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	))
=	4.29	-	1.906	-	( 0.028	-	max(0, 2.117	-	1.515	+	0.028	))
=	2.986

Note: The Operating Income data used here is four times the quarterly (Jun. 2014) data.

ARC Real Estate Spa (MIL:YARC) 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, ARC Real Estate Spa's WACC % is 2.13%. ARC Real Estate Spa's ROC % is -0.29% (calculated using TTM income statement data). ARC Real Estate 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.

ARC Real Estate Spa ROC % Related Terms

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ARC Real Estate Spa (MIL:YARC) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

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Address

Website

http://www.arcgroup.it

ARC Real Estate Spa provides services which include information on real estate, estimates the market value of property, services for the judicial recovery of debts, computer services and consulting for manufacturing & commercial distribution.

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