Harju Elekter Group (OTSE:HAE1T) ROC % : 6.31% (As of Sep. 2024)

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What is Harju Elekter Group 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 %. Harju Elekter Group's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 6.31%.

As of today (2024-12-12), Harju Elekter Group's WACC % is 8.18%. Harju Elekter Group's ROC % is 4.92% (calculated using TTM income statement data). Harju Elekter Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Harju Elekter Group ROC % Historical Data

The historical data trend for Harju Elekter Group'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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Harju Elekter Group ROC % Chart

Harju Elekter Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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2.98

6.44

2.62

-3.71

4.82

Harju Elekter Group Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															9.68	0.50	2.21	10.48	6.31

Harju Elekter Group ROC % Calculation

Harju Elekter Group'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 )
=	8.156 * ( 1 - 15.02% )	/	( (136.395	+	151.248)	/ 2 )
=	6.9309688	/	143.8215
=	4.82 %

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	))
=	171.437	-	27.379	-	( 9.152	-	max(0, 71.295	-	78.958	+	9.152	))
=	136.395

	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	))
=	178.375	-	25.746	-	( 1.381	-	max(0, 64.864	-	78.123	+	1.381	))
=	151.248

Harju Elekter Group's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	10.84 * ( 1 - 18.47% )	/	( (144.194	+	135.781)	/ 2 )
=	8.837852	/	139.9875
=	6.31 %

where

	Invested Capital		(Q: Jun. 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	))
=	178.394	-	32.568	-	( 1.632	-	max(0, 63.52	-	80.205	+	1.632	))
=	144.194

	Invested Capital		(Q: Sep. 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	))
=	163.493	-	25.745	-	( 1.967	-	max(0, 46.946	-	65.17	+	1.967	))
=	135.781

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

Harju Elekter Group (OTSE:HAE1T) 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, Harju Elekter Group's WACC % is 8.18%. Harju Elekter Group's ROC % is 4.92% (calculated using TTM income statement data). Harju Elekter Group 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.

Harju Elekter Group ROC % Related Terms

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Harju Elekter Group Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Harju Elekter Group (OTSE:HAE1T) » Definitions » ROC %

Traded in Other Exchanges

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Address

Paldiski maantee 31/2, Keila, EST, 76606

Website

https://www.harjuelekter.com

Harju Elekter Group is an Estonia-based company engaged in the production of electrical equipment. The company operates in two segments including Production and Real estate. The Production segment includes factories producing power distribution and control equipment in Estonia, Finland, Sweden, and Lithuania. The core production of factories consists of equipment for the distribution of medium and low-voltage electricity, various electrical power switching and conversion devices, and automation and control centers for use by the energy, industrial, and maritime sectors, and infrastructure objects. The Real estate segment includes the development, project management, leasing, and other related services of industrial real estate for leasing partners and the group's companies.

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