Old Chang Kee (SGX:5ML) ROC % : 17.39% (As of Mar. 2024)

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What is Old Chang Kee 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 %. Old Chang Kee's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 17.39%.

As of today (2024-12-12), Old Chang Kee's WACC % is 3.38%. Old Chang Kee's ROC % is 17.27% (calculated using TTM income statement data). Old Chang Kee 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.

Old Chang Kee ROC % Historical Data

The historical data trend for Old Chang Kee'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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Old Chang Kee ROC % Chart

Old Chang Kee Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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4.74

14.64

10.54

12.03

16.52

Old Chang Kee Semi-Annual Data
	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23	Mar24
ROC %	Get a 7-Day Free Trial															7.79	12.97	12.54	17.92	17.39

Old Chang Kee ROC % Calculation

Old Chang Kee's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	13.159 * ( 1 - 22.67% )	/	( (58.395	+	64.779)	/ 2 )
=	10.1758547	/	61.587
=	16.52 %

where

	Invested Capital		(A: Mar. 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	))
=	79.368	-	4.168	-	( 33.927	-	max(0, 23.577	-	40.382	+	33.927	))
=	58.395

	Invested Capital		(A: 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	))
=	92.062	-	4.318	-	( 44.098	-	max(0, 28.173	-	51.138	+	44.098	))
=	64.779

Old Chang Kee'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: Sep. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	13.182 * ( 1 - 21.89% )	/	( (53.62	+	64.779)	/ 2 )
=	10.2964602	/	59.1995
=	17.39 %

where

	Invested Capital		(Q: Sep. 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	))
=	82.61	-	9.082	-	( 37.538	-	max(0, 24.506	-	44.414	+	37.538	))
=	53.62

	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	))
=	92.062	-	4.318	-	( 44.098	-	max(0, 28.173	-	51.138	+	44.098	))
=	64.779

Note: The Operating Income data used here is two times the semi-annual (Mar. 2024) data.

Old Chang Kee (SGX:5ML) 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, Old Chang Kee's WACC % is 3.38%. Old Chang Kee's ROC % is 17.27% (calculated using TTM income statement data). Old Chang Kee 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.

Old Chang Kee ROC % Related Terms

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Old Chang Kee Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » Old Chang Kee Ltd (SGX:5ML) » Definitions » ROC %

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Traded in Other Exchanges

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Address

2 Woodlands Terrace, Singapore, SGP, 738427

Website

https://www.oldchangkee.com

Old Chang Kee Ltd is engaged in the manufacturing and distribution of food products. The company's products include curry puffs, fishballs, chicken nuggets, and chicken wings. It also provides catering services in Singapore. The company's geographical segments include Singapore, Australia, and Malaysia, and a majority of its revenue is derived from Singapore. The company is engaged in the manufacture and sale of food products under brands such as Old Chang Kee, the Curry Times, and Dip n Go.

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