HG Metal Manufacturing (SGX:BTG) ROC % : 7.22% (As of Jun. 2024)

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What is HG Metal Manufacturing 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 %. HG Metal Manufacturing's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 7.22%.

As of today (2024-12-15), HG Metal Manufacturing's WACC % is 7.93%. HG Metal Manufacturing's ROC % is 6.41% (calculated using TTM income statement data). HG Metal Manufacturing earns returns that do not match up to its cost of capital. It will destroy value as it grows.

HG Metal Manufacturing ROC % Historical Data

The historical data trend for HG Metal Manufacturing'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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HG Metal Manufacturing ROC % Chart

HG Metal Manufacturing Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-0.22

0.36

11.71

4.29

1.30

HG Metal Manufacturing Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															10.36	-2.10	-3.49	5.34	7.22

HG Metal Manufacturing ROC % Calculation

HG Metal Manufacturing'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 )
=	0.497 * ( 1 - -212.41% )	/	( (130.762	+	107.984)	/ 2 )
=	1.5526777	/	119.373
=	1.30 %

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	))
=	158.275	-	8.245	-	( 19.268	-	max(0, 36.857	-	121.667	+	19.268	))
=	130.762

	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	))
=	137.058	-	9.132	-	( 19.942	-	max(0, 18.162	-	111.046	+	19.942	))
=	107.984

HG Metal Manufacturing's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	9.434 * ( 1 - 16.36% )	/	( (107.984	+	110.598)	/ 2 )
=	7.8905976	/	109.291
=	7.22 %

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	))
=	137.058	-	9.132	-	( 19.942	-	max(0, 18.162	-	111.046	+	19.942	))
=	107.984

	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	))
=	140.05	-	6.875	-	( 22.577	-	max(0, 14.369	-	114.405	+	22.577	))
=	110.598

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

HG Metal Manufacturing (SGX:BTG) 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, HG Metal Manufacturing's WACC % is 7.93%. HG Metal Manufacturing's ROC % is 6.41% (calculated using TTM income statement data). HG Metal Manufacturing 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.

HG Metal Manufacturing ROC % Related Terms

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HG Metal Manufacturing Business Description

Industry

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Address

28 Jalan Buroh, Singapore, SGP, 619484

Website

http://www.hgmetal.com

HG Metal Manufacturing Ltd is involved in the steel business. The company has business units which include HG Distribution, HG Construction Steel, HG Coupler, and Thread. The operating segment of the company is Trading Segment, Manufacturing Segment, and Others. The trading segment is a supplier of steel products and includes the holding of investments in subsidiaries in the business of steel distribution and provision of industrial steel services. The manufacturing segment produces construction steel products and provides related engineering services. Others include those which do not fall in the trading and manufacturing segment. The majority is from the manufacturing segment. Geographically, the majority is derived from Singapore.