RLJPA.PFD (RLJ Lodging Trust) ROC % : 2.41% (As of Dec. 2024)

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What is RLJ Lodging Trust 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 %. RLJ Lodging Trust's annualized return on capital (ROC %) for the quarter that ended in Dec. 2024 was 2.41%.

As of today (2025-03-28), RLJ Lodging Trust's WACC % is 7.01%. RLJ Lodging Trust's ROC % is 3.30% (calculated using TTM income statement data). RLJ Lodging Trust earns returns that do not match up to its cost of capital. It will destroy value as it grows.

RLJ Lodging Trust ROC % Historical Data

The historical data trend for RLJ Lodging Trust'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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RLJ Lodging Trust ROC % Chart

RLJ Lodging Trust Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Dec24

ROC %

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-6.17

-1.11

2.67

3.47

3.36

RLJ Lodging Trust Quarterly Data
	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24	Dec24
ROC %	Get a 7-Day Free Trial															2.44	1.99	5.03	3.52	2.41

RLJ Lodging Trust ROC % Calculation

RLJ Lodging Trust's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2024 is calculated as:

	ROC % (A: Dec. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2023 )	+	Invested Capital (A: Dec. 2024 ))	/ count )
=	150.22 * ( 1 - 2.29% )	/	( (4312.035	+	4426.334)	/ 2 )
=	146.779962	/	4369.1845
=	3.36 %

where

	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	))
=	4919.295	-	192.858	-	( 516.675	-	max(0, 225.139	-	639.541	+	516.675	))
=	4312.035

	Invested Capital		(A: Dec. 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	))
=	4883.879	-	206.177	-	( 409.809	-	max(0, 246.419	-	497.787	+	409.809	))
=	4426.334

RLJ Lodging Trust's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2024 is calculated as:

	ROC % (Q: Dec. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2024 )	+	Invested Capital (Q: Dec. 2024 ))	/ count )
=	117.124 * ( 1 - 8.59% )	/	( (4473.855	+	4426.334)	/ 2 )
=	107.0630484	/	4450.0945
=	2.41 %

where

	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	))
=	4887.991	-	197.478	-	( 385.384	-	max(0, 234.121	-	450.779	+	385.384	))
=	4473.855

	Invested Capital		(Q: Dec. 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	))
=	4883.879	-	206.177	-	( 409.809	-	max(0, 246.419	-	497.787	+	409.809	))
=	4426.334

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

RLJ Lodging Trust (NYSE:RLJpA.PFD) 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, RLJ Lodging Trust's WACC % is 7.01%. RLJ Lodging Trust's ROC % is 3.30% (calculated using TTM income statement data). RLJ Lodging Trust 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.

RLJ Lodging Trust ROC % Related Terms

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RLJ Lodging Trust Business Description

Industry

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RLJ:USA

Address

7373 Wisconsin Avenue, Suite 1500, Bethesda, MD, USA, 20814

Website

https://www.rljlodgingtrust.com

RLJ Lodging Trust is a real estate investment trust focused on premium-branded, rooms-oriented, high-margin, focused-service, and compact full-service hotels located within the heart of demand locations. Its hotels are geographically diverse and concentrated in urban markets providing multiple demand generators from business, leisure, and other travelers. Its hotels are under the Marriott, Hilton, and Hyatt brand names. The Hotel is a single reportable segment. Its hotel segment revenues are derived from the operation of hotel properties which includes room revenue by renting hotel rooms, food and beverage revenue from the sale of food and beverages, and other revenue from parking fees, resort fees, gift shop sales, and other guest service fees.