Federal-Mogul Goetze (India) (NSE:FMGOETZE) ROC % : 9.34% (As of Dec. 2023)

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What is Federal-Mogul Goetze (India) 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 %. Federal-Mogul Goetze (India)'s annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 9.34%.

As of today (2024-05-20), Federal-Mogul Goetze (India)'s WACC % is 5.89%. Federal-Mogul Goetze (India)'s ROC % is 12.78% (calculated using TTM income statement data). Federal-Mogul Goetze (India) 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.

Federal-Mogul Goetze (India) ROC % Historical Data

The historical data trend for Federal-Mogul Goetze (India)'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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Federal-Mogul Goetze (India) ROC % Chart

Federal-Mogul Goetze (India) Annual Data

Trend

Dec13

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROC %

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10.36

4.16

3.84

6.70

11.61

Federal-Mogul Goetze (India) Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial															11.63	14.11	13.41	14.32	9.34

Federal-Mogul Goetze (India) ROC % Calculation

Federal-Mogul Goetze (India)'s annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	1256.139 * ( 1 - 23.87% )	/	( (8437.767	+	8031.6)	/ 2 )
=	956.2986207	/	8234.6835
=	11.61 %

where

	Invested Capital		(A: Mar. 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	))
=	13404.37	-	3100.419	-	( 1866.184	-	max(0, 3513.083	-	7044.533	+	1866.184	))
=	8437.767

	Invested Capital		(A: Mar. 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	))
=	14872.61	-	3422.152	-	( 3418.858	-	max(0, 3943.326	-	8347.827	+	3418.858	))
=	8031.6

Federal-Mogul Goetze (India)'s annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	1051.788 * ( 1 - 26.47% )	/	( (8282.533	+	0)	/ 1 )
=	773.3797164	/	8282.533
=	9.34 %

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	))
=	15568.332	-	3464.355	-	( 3821.444	-	max(0, 4026.961	-	9070.344	+	3821.444	))
=	8282.533

	Invested Capital		(Q: Dec. 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	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Federal-Mogul Goetze (India) (NSE:FMGOETZE) 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, Federal-Mogul Goetze (India)'s WACC % is 5.89%. Federal-Mogul Goetze (India)'s ROC % is 12.78% (calculated using TTM income statement data). Federal-Mogul Goetze (India) 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.

Federal-Mogul Goetze (India) ROC % Related Terms

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Federal-Mogul Goetze (India) (NSE:FMGOETZE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Federal-Mogul Goetze (India) Ltd (NSE:FMGOETZE) » Definitions » ROC %

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Traded in Other Exchanges

505744:India

Address

Golf Course Road, Sector-54, 10th Floor, Tower B, Paras Twin Towers, Gurugram, HR, IND, 122 002

Website

http://www.federalmogulgoetzeindia.net

Federal-Mogul Goetze (India) Ltd is engaged in the manufacture, supply, and distribution of automotive components used in automobiles. It offers Pistons, Piston rings, Sintered parts, and Cylinder liners which are used for cars, SUVs, tractors, commercial vehicles, stationary engines, and high-output locomotive diesel engines. It is principally in the automotive components segment. The group has a business presence in India and other countries, of which a majority of revenue is generated within India.

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