ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Solution Dynamics's annualized return on capital (ROC %) for the quarter that ended in Dec. 2025 was 3.59%.
As of today (2026-06-26), Solution Dynamics's WACC % is 5.76%. Solution Dynamics's ROC % is 4.64% (calculated using TTM income statement data).
Solution Dynamics earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Solution Dynamics (NZSE:SDL) 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, Solution Dynamics's WACC % is 5.76%. Solution Dynamics's ROC % is 4.64% (calculated using TTM income statement data).
Solution Dynamics 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.
Solution Dynamics ROC % Related Terms
Solution Dynamics ROC % Historical Data
* Premium members only.
The historical data trend for Solution Dynamics'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.
Note:
The Operating Income data used here is two times the semi-annual (Dec. 2025) data.
The tax rate is limited to between 0% and 100%.
* 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.
Solution Dynamics (NZSE:SDL) has a ROC % of 3.59% as of Dec. 2025. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Solution Dynamics and its competitors.
Is Solution Dynamics' ROC % too high?
Solution Dynamics' current ROC % is 3.59%. The Software industry median ROC % is 3.11. Solution Dynamics' value of 3.59% is 15.6% above this industry median. Overall, Solution Dynamics has a GF Score™ of 59/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Solution Dynamics' ROC % compare to CRM and SHOP?
Solution Dynamics' ROC % of 3.59% can be compared against companies in the Software industry. The industry median ROC % is 3.11. Solution Dynamics' value of 3.59% is 15.6% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Software company?
The median ROC % among Software companies is 3.11, based on 2,830 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Solution Dynamics's current ROC % of 3.59% is 15.6% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Solution Dynamics and its competitors. For the Software industry, the median ROC % is 3.11 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Solution Dynamics's current ROC % is 3.59%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Solution Dynamics stock overvalued right now?
Based on GuruFocus' analysis, Solution Dynamics (NZSE:SDL) is currently considered Significantly Undervalued. The stock's GF Value™ is NZ$0.99, compared to a current price of NZ$0.61 — trading 38.4% below its estimated fair value. The current ROC % is 3.59% and 15.6% above the Software industry median of 3.11. Solution Dynamics' overall GF Score™ is 59/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Solution Dynamics (NZSE:SDL), the current ROC % is 3.59% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Solution Dynamics (NZSE:SDL) Overvalued in 2026?
Based on GuruFocus' analysis, Solution Dynamics stock appears to be undervalued.
The current stock price of NZ$0.61 is trading 38.4% below its estimated GF Value™ of NZ$0.99.
GuruFocus considers Solution Dynamics to be Significantly Undervalued.
Key valuation signals for NZSE:SDL:
ROC %: 3.59%
GF Value™: NZ$0.99 vs. price of NZ$0.61 (38.4% below fair value)
Industry Position: 15.6% above the Software median
No single metric tells the full story. See the NZSE:SDL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Solution Dynamics Ltd is a company engaged in providing customer communications solutions. Its products and services are represented by revenue streams: Digital Printing & Document Handling Services; and Software and Technology, Outsourced services. Services include digital print and mail house processing for mail items like invoices, statements, and promotional materials. Software and Technology develop and markets its software products related to multi-channel marketing communications including digital asset management, communication templates, campaign management, document archiving, document composition, and desktop mail solutions among others. Its outsourced services elements are the post, freight, paper, and envelopes.
59GF Score
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