Ion Exchange (India) (NSE:IONEXCHANG) ROC % : 5.39% (As of Mar. 2024)

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What is Ion Exchange (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 %. Ion Exchange (India)'s annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 5.39%.

As of today (2024-12-14), Ion Exchange (India)'s WACC % is 8.79%. Ion Exchange (India)'s ROC % is 6.12% (calculated using TTM income statement data). Ion Exchange (India) earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Ion Exchange (India) ROC % Historical Data

The historical data trend for Ion Exchange (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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Ion Exchange (India) ROC % Chart

Ion Exchange (India) Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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12.43

21.30

21.53

19.96

15.42

Ion Exchange (India) Semi-Annual Data
	Mar10	Mar11	Mar12	Mar13	Mar14	Mar15	Mar16	Mar17	Mar18	Mar19	Mar20	Mar21	Mar22	Mar23	Mar24
ROC %	Get a 7-Day Free Trial										3.99	12.65	9.59	8.43	5.39

Ion Exchange (India) ROC % Calculation

Ion Exchange (India)'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 )
=	2474.918 * ( 1 - 27.35% )	/	( (10085.435	+	13233.902)	/ 2 )
=	1798.027927	/	11659.6685
=	15.42 %

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	))
=	19401.45	-	5915.921	-	( 3400.094	-	max(0, 10513.539	-	16279.074	+	3400.094	))
=	10085.435

	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	))
=	24493.652	-	7559.959	-	( 3699.791	-	max(0, 12590.838	-	19506.377	+	3699.791	))
=	13233.902

Ion Exchange (India)'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: Mar. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	937.318 * ( 1 - 23.89% )	/	( (10085.435	+	13233.902)	/ 2 )
=	713.3927298	/	11659.6685
=	6.12 %

where

	Invested Capital		(Q: 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	))
=	19401.45	-	5915.921	-	( 3400.094	-	max(0, 10513.539	-	16279.074	+	3400.094	))
=	10085.435

	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	))
=	24493.652	-	7559.959	-	( 3699.791	-	max(0, 12590.838	-	19506.377	+	3699.791	))
=	13233.902

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

Ion Exchange (India) (NSE:IONEXCHANG) 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, Ion Exchange (India)'s WACC % is 8.79%. Ion Exchange (India)'s ROC % is 6.12% (calculated using TTM income statement data). Ion Exchange (India) 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.

Ion Exchange (India) ROC % Related Terms

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Ion Exchange (India) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Ion Exchange (India) Ltd (NSE:IONEXCHANG) » Definitions » ROC %

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500214:India

Address

Dr. E. Moses Road, Ion House, Mahalaxmi, Mumbai, MH, IND, 400011

Website

https://www.ionindia.com

Ion Exchange (India) Ltd offers a wide range of solutions across the water cycle from pre-treatment to process water treatment, wastewater treatment, recycling, zero liquid discharge, sewage treatment, packaged drinking water, seawater desalination, etc. It also engaged in manufacturing resins, and specialty chemicals for water and wastewater treatment as well as non-water applications. It operates its business through the Engineering segment, which is a key revenue driver that comprises water treatment plants, spares, and services in connection with the plants; the Chemicals segment consists of resins, water treatment chemicals, sugar chemicals, and paper chemicals; and the Consumer Products segment comprises domestic water purifiers. It caters to both domestic and international markets.

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