Srivari Spices and Foods (NSE:SSFL) ROC % : 23.96% (As of Mar. 2023)

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What is Srivari Spices and Foods 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 %. Srivari Spices and Foods's annualized return on capital (ROC %) for the quarter that ended in Mar. 2023 was 23.96%.

As of today (2024-06-10), Srivari Spices and Foods's WACC % is 12.91%. Srivari Spices and Foods's ROC % is 23.97% (calculated using TTM income statement data). Srivari Spices and Foods 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.

Srivari Spices and Foods ROC % Historical Data

The historical data trend for Srivari Spices and Foods'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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Srivari Spices and Foods ROC % Chart

Srivari Spices and Foods Annual Data

Trend

Mar21

Mar22

Mar23

ROC %

8.86

13.18

23.96

Srivari Spices and Foods Semi-Annual Data
	Mar21	Mar22	Mar23
ROC %	8.86	13.18	23.96

Srivari Spices and Foods ROC % Calculation

Srivari Spices and Foods'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 )
=	51.786 * ( 1 - 27.78% )	/	( (82.478	+	229.65)	/ 2 )
=	37.3998492	/	156.064
=	23.96 %

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	))
=	106.762	-	23.788	-	( 0.496	-	max(0, 47.942	-	61.304	+	0.496	))
=	82.478

	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	))
=	256.813	-	27.033	-	( 0.13	-	max(0, 125.52	-	206.225	+	0.13	))
=	229.65

Srivari Spices and Foods's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2023 is calculated as:

	ROC % (Q: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2022 )	+	Invested Capital (Q: Mar. 2023 ))	/ count )
=	51.786 * ( 1 - 27.78% )	/	( (82.478	+	229.65)	/ 2 )
=	37.3998492	/	156.064
=	23.96 %

where

	Invested Capital		(Q: 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	))
=	106.762	-	23.788	-	( 0.496	-	max(0, 47.942	-	61.304	+	0.496	))
=	82.478

	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	))
=	256.813	-	27.033	-	( 0.13	-	max(0, 125.52	-	206.225	+	0.13	))
=	229.65

Note: The Operating Income data used here is one times the annual (Mar. 2023) data.

Srivari Spices and Foods (NSE:SSFL) 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, Srivari Spices and Foods's WACC % is 12.91%. Srivari Spices and Foods's ROC % is 23.97% (calculated using TTM income statement data). Srivari Spices and Foods 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.

Srivari Spices and Foods ROC % Related Terms

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Srivari Spices and Foods (NSE:SSFL) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Srivari Spices and Foods Ltd (NSE:SSFL) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

207, Second Floor, RDB Blue Hope, 4-1-878, 876, 877 and 877/1, Abids, Hyderabad, TG, IND, 500001

Website

https://www.srivarispices.com

Srivari Spices and Foods Ltd is engaged in the business of manufacturing spices and flour (chakki atta) and marketing and selling them in and around Telangana and Andhra Pradesh. The company handpicks its raw materials from various parts of the country and processes its products with utmost care without the use of artificial preservatives or chemicals, thereby creating a product portfolio of organic spices and flour, which carry the freshness and goodness of each ingredient.

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