Karnell Group AB (OSTO:KARNEL B) ROC % : 1.44% (As of Mar. 2024)

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What is Karnell Group AB 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 %. Karnell Group AB's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 1.44%.

As of today (2024-06-08), Karnell Group AB's WACC % is 7.39%. Karnell Group AB's ROC % is 0.36% (calculated using TTM income statement data). Karnell Group AB earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Karnell Group AB ROC % Historical Data

The historical data trend for Karnell Group AB'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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Karnell Group AB ROC % Chart

Karnell Group AB Annual Data

Trend

Dec21

Dec22

Dec23

ROC %

4.16

7.88

10.41

Karnell Group AB Quarterly Data
	Dec21	Dec22	Mar23	Dec23	Mar24
ROC %	-	-	5.22	-	1.44

Karnell Group AB ROC % Calculation

Karnell Group AB's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	170.1 * ( 1 - 26.89% )	/	( (1063.647	+	1325.938)	/ 2 )
=	124.36011	/	1194.7925
=	10.41 %

where

	Invested Capital		(A: Dec. 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	))
=	1281.853	-	69.524	-	( 148.682	-	max(0, 287.939	-	514.99	+	148.682	))
=	1063.647

	Invested Capital		(A: 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	))
=	1600.368	-	84.014	-	( 190.416	-	max(0, 324.105	-	673.387	+	190.416	))
=	1325.938

Karnell Group AB'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: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	67.6 * ( 1 - 69.44% )	/	( (1325.938	+	1547.8)	/ 2 )
=	20.65856	/	1436.869
=	1.44 %

where

	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	))
=	1600.368	-	84.014	-	( 190.416	-	max(0, 324.105	-	673.387	+	190.416	))
=	1325.938

	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	))
=	2030.5	-	95.6	-	( 387.1	-	max(0, 397	-	930.6	+	387.1	))
=	1547.8

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

Karnell Group AB (OSTO:KARNEL B) 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, Karnell Group AB's WACC % is 7.39%. Karnell Group AB's ROC % is 0.36% (calculated using TTM income statement data). Karnell Group AB 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.

Karnell Group AB ROC % Related Terms

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Karnell Group AB (OSTO:KARNEL B) Business Description

Industry

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Traded in Other Exchanges

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Address

Riddargatan 13D, Stockholm, SWE, 114 51

Website

https://www.karnell.se

Karnell Group AB is a company that is an active owner of industrial technology companies. The Company's business concept is to use a systematic and proactive acquisition strategy to identify and invest in industrial technology companies where Karnell believes there is development potential and thus an opportunity for value creation with Karnell as a long-term owner. It consists of twelve directly owned group companies, with subsidiaries, divided into two business areas that includes Product companies and Niched manufacturers. The business area Product companies consists of companies that wholly or predominantly base their business on proprietary products, which may include various rights such as trademarks, patents, etc.

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