Innomet Advanced Materials (NSE:INNOMET) ROC % : 5.97% (As of Mar. 2024)

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What is Innomet Advanced Materials 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 %. Innomet Advanced Materials's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 5.97%.

As of today (2025-03-30), Innomet Advanced Materials's WACC % is 13.07%. Innomet Advanced Materials's ROC % is 12.00% (calculated using TTM income statement data). Innomet Advanced Materials earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Innomet Advanced Materials ROC % Historical Data

The historical data trend for Innomet Advanced Materials'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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Innomet Advanced Materials ROC % Chart

Innomet Advanced Materials Annual Data

Trend

Mar21

Mar22

Mar23

Mar24

ROC %

7.83

11.26

22.45

12.29

Innomet Advanced Materials Semi-Annual Data
	Mar21	Mar22	Mar23	Sep23	Mar24
ROC %	-	-	-	15.68	5.97

Innomet Advanced Materials ROC % Calculation

Innomet Advanced Materials's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	41.615 * ( 1 - 22.81% )	/	( (209.256	+	313.516)	/ 2 )
=	32.1226185	/	261.386
=	12.29 %

where

	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	))
=	225.719	-	16.409	-	( 0.054	-	max(0, 71.161	-	121.368	+	0.054	))
=	209.256

	Invested Capital		(A: 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	))
=	341.676	-	28.001	-	( 0.159	-	max(0, 125.144	-	155.476	+	0.159	))
=	313.516

Innomet Advanced Materials'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 )
=	44.864 * ( 1 - 60.52% )	/	( (280.157	+	313.516)	/ 2 )
=	17.7123072	/	296.8365
=	5.97 %

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	))
=	305.014	-	23.919	-	( 0.938	-	max(0, 91.278	-	135.879	+	0.938	))
=	280.157

	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	))
=	341.676	-	28.001	-	( 0.159	-	max(0, 125.144	-	155.476	+	0.159	))
=	313.516

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

Innomet Advanced Materials (NSE:INNOMET) 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, Innomet Advanced Materials's WACC % is 13.07%. Innomet Advanced Materials's ROC % is 12.00% (calculated using TTM income statement data). Innomet Advanced Materials 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.

Innomet Advanced Materials ROC % Related Terms

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Innomet Advanced Materials Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Innomet Advanced Materials Ltd (NSE:INNOMET) » Definitions » ROC %

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Traded in Other Exchanges

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Address

B-31, BHEL Ancillary Industrial Estate, Ramachandrapuram, Medak, Hyderabad, TG, IND, 502032

Website

https://www.innomet.net

Innomet Advanced Materials Ltd is engaged in manufacturing and supplying Ferrous & Non-Ferrous Metal/Alloy Powders and Tungsten Heavy Alloy components. It has 2 divisions with brand names as under: Innomet Powders, and Innotung. Innomet Powders is a manufacturer of Metal and Alloy Powders through water, air and gas atomization processes. Innotung is the brand name for The Tungsten Heavy Alloy series manufactured through the Powder Metallurgy process by the Company. it supplies the material in the form of bars, plates, cubes, spheres and components of various sizes and shapes also in the finished machined condition as per customer drawings.

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