Zahrat Al Waha for Trading Co (SAU:3007) ROC % : 3.21% (As of Mar. 2024)

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What is Zahrat Al Waha for Trading 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 %. Zahrat Al Waha for Trading Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 3.21%.

As of today (2024-05-22), Zahrat Al Waha for Trading Co's WACC % is 9.79%. Zahrat Al Waha for Trading Co's ROC % is 8.31% (calculated using TTM income statement data). Zahrat Al Waha for Trading Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Zahrat Al Waha for Trading Co ROC % Historical Data

The historical data trend for Zahrat Al Waha for Trading 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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Zahrat Al Waha for Trading Co ROC % Chart

Zahrat Al Waha for Trading Co Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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15.00

10.62

13.79

6.07

8.09

Zahrat Al Waha for Trading Co Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															3.29	7.81	9.29	13.48	3.21

Zahrat Al Waha for Trading Co ROC % Calculation

Zahrat Al Waha for Trading 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 )
=	49.151 * ( 1 - 9.94% )	/	( (543.243	+	550.844)	/ 2 )
=	44.2653906	/	547.0435
=	8.09 %

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	))
=	584.306	-	21.107	-	( 19.956	-	max(0, 275.768	-	362.032	+	19.956	))
=	543.243

	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	))
=	607.433	-	26.446	-	( 30.143	-	max(0, 260.61	-	372.051	+	30.143	))
=	550.844

Zahrat Al Waha for Trading Co'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 )
=	23.196 * ( 1 - 22.98% )	/	( (550.844	+	560.545)	/ 2 )
=	17.8655592	/	555.6945
=	3.21 %

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	))
=	607.433	-	26.446	-	( 30.143	-	max(0, 260.61	-	372.051	+	30.143	))
=	550.844

	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	))
=	616.319	-	26.44	-	( 29.334	-	max(0, 266.731	-	385.05	+	29.334	))
=	560.545

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

Zahrat Al Waha for Trading Co (SAU:3007) 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, Zahrat Al Waha for Trading Co's WACC % is 9.79%. Zahrat Al Waha for Trading Co's ROC % is 8.31% (calculated using TTM income statement data). Zahrat Al Waha for Trading Co 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.

Zahrat Al Waha for Trading Co ROC % Related Terms

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Zahrat Al Waha for Trading Co (SAU:3007) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Packaging & Containers » Zahrat Al Waha for Trading Co (SAU:3007) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

Al Rabwa, Al Ihsa Street, P.O. Box 2980, Unit no 1, Building 7449, Riyadh, SAU, 12814

Website

http://www.zaoasis.com

Zahrat Al Waha for Trading Co is a producer of PET preform and HDPE closure (caps) products. The principal activities of the company include the manufacture of semi-finished products from plastics, the manufacture of cans and boxes from plastics, the manufacture of bottles of various forms from plastics, the manufacture of products from plastics using the Roto mold method. The company operates in two segments namely the plastic bottles preforms which includes manufacturing and selling of plastic preforms and the plastic caps which includes manufacturing and selling of plastic caps.

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