Sumou Real Estate Co (SAU:4323) ROC % : 8.01% (As of Mar. 2024)

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What is Sumou Real Estate 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 %. Sumou Real Estate Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 8.01%.

As of today (2024-06-07), Sumou Real Estate Co's WACC % is 10.24%. Sumou Real Estate Co's ROC % is 15.11% (calculated using TTM income statement data). Sumou Real Estate 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.

Sumou Real Estate Co ROC % Historical Data

The historical data trend for Sumou Real Estate 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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Sumou Real Estate Co ROC % Chart

Sumou Real Estate Co Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

14.35

12.91

8.40

10.64

15.51

Sumou Real Estate Co Quarterly Data
	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial									6.29	24.70	19.60	11.83	8.01

Sumou Real Estate Co ROC % Calculation

Sumou Real Estate 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 )
=	102.861 * ( 1 - 5.49% )	/	( (586.459	+	667.008)	/ 2 )
=	97.2139311	/	626.7335
=	15.51 %

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	))
=	718.251	-	71.89	-	( 59.902	-	max(0, 146.717	-	259.491	+	59.902	))
=	586.459

	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	))
=	850.113	-	180.45	-	( 2.655	-	max(0, 272.993	-	338.72	+	2.655	))
=	667.008

Sumou Real Estate 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 )
=	64.08 * ( 1 - 8.73% )	/	( (667.008	+	793.637)	/ 2 )
=	58.485816	/	730.3225
=	8.01 %

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	))
=	850.113	-	180.45	-	( 2.655	-	max(0, 272.993	-	338.72	+	2.655	))
=	667.008

	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	))
=	978.272	-	178.653	-	( 5.982	-	max(0, 297.822	-	363.249	+	5.982	))
=	793.637

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

Sumou Real Estate Co (SAU:4323) 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, Sumou Real Estate Co's WACC % is 10.24%. Sumou Real Estate Co's ROC % is 15.11% (calculated using TTM income statement data). Sumou Real Estate 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.

Sumou Real Estate Co ROC % Related Terms

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Sumou Real Estate Co (SAU:4323) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Sumou Real Estate Co (SAU:4323) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

Prince Turki bin Abdulaziz street, Sumou Tower - P.O.Box 250, Al-Yarmouk District, AlKhobar, SAU, 31952

Website

https://www.sumou.com.sa

Sumou Real Estate Co is engaged in executing and managing real estate development and investment projects in the Kingdom of Saudi Arabia. The company's projects portfolio includes commercial centers, residential complexes, housing units, infrastructure for industrial, and commercial facilities, economic cities, and free zones.

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