Tanmiah Food Co (SAU:2281) ROC % : 10.44% (As of Sep. 2024)

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What is Tanmiah Food Co 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 %. Tanmiah Food Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 10.44%.

As of today (2025-01-19), Tanmiah Food Co's WACC % is 8.91%. Tanmiah Food Co's ROC % is 10.05% (calculated using TTM income statement data). Tanmiah Food Co 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.

Tanmiah Food Co ROC % Historical Data

The historical data trend for Tanmiah Food Co'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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Tanmiah Food Co ROC % Chart

Tanmiah Food Co Annual Data

Trend

Dec20

Dec21

Dec22

Dec23

ROC %

10.39

1.80

9.04

8.29

Tanmiah Food Co Quarterly Data
	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial											8.62	10.58	9.09	10.03	10.44

Tanmiah Food Co ROC % Calculation

Tanmiah Food Co'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 )
=	136.737 * ( 1 - 9.84% )	/	( (1287.276	+	1686.275)	/ 2 )
=	123.2820792	/	1486.7755
=	8.29 %

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	))
=	1800.583	-	246.259	-	( 267.048	-	max(0, 746.801	-	1021.164	+	267.048	))
=	1287.276

	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	))
=	2012.383	-	215.075	-	( 111.033	-	max(0, 780.732	-	976.11	+	111.033	))
=	1686.275

Tanmiah Food Co'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 )
=	203.864 * ( 1 - 13.48% )	/	( (1545.466	+	1833.365)	/ 2 )
=	176.3831328	/	1689.4155
=	10.44 %

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	))
=	2299.733	-	654.153	-	( 100.114	-	max(0, 881.39	-	1138.292	+	100.114	))
=	1545.466

	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	))
=	2575.059	-	607.444	-	( 134.25	-	max(0, 938.171	-	1270.661	+	134.25	))
=	1833.365

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

Tanmiah Food Co (SAU:2281) 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, Tanmiah Food Co's WACC % is 8.91%. Tanmiah Food Co's ROC % is 10.05% (calculated using TTM income statement data). Tanmiah Food Co 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.

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Tanmiah Food Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Tanmiah Food Co (SAU:2281) » Definitions » ROC %

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Traded in Other Exchanges

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Address

King Fahd Road, Ar Rahmaniyah, Riyadh, SAU, 12341

Website

https://www.tanmiah.com

Tanmiah Food Co produces and markets ready-to-cook, ready-to-eat, and bespoke poultry, turkey, and beef products. Its Business is engaged in Food and Agriculture and the Construction of poultry farms. The Food and Agriculture business includes manufacturing, wholesale, and retail trading in foodstuff, and preparation of animal and poultry feeds for commercial purposes. It also undertakes the construction of poultry farms, retail and wholesale trading in poultry equipment, and restaurant outlets with related services. Geographically it operates in the Kingdom of Saudi Arabia, the Kingdom of Bahrain, UAE, and other GCC countries out of which it earns key revenue from domestic sales.

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