Huidanitary Ware Co (SHSE:603385) ROC % : 2.01% (As of Jun. 2024)

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What is Huidanitary Ware 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 %. Huidanitary Ware Co's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 2.01%.

As of today (2024-09-21), Huidanitary Ware Co's WACC % is 10.03%. Huidanitary Ware Co's ROC % is 3.66% (calculated using TTM income statement data). Huidanitary Ware Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Huidanitary Ware Co ROC % Historical Data

The historical data trend for Huidanitary Ware 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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Huidanitary Ware Co ROC % Chart

Huidanitary Ware Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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10.84

10.90

6.14

2.74

3.68

Huidanitary Ware Co Quarterly Data
	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24
ROC %	Get a 7-Day Free Trial															2.37	9.37	0.38	1.63	2.01

Huidanitary Ware Co ROC % Calculation

Huidanitary Ware 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 )
=	145.07 * ( 1 - -13.69% )	/	( (4511.319	+	4463.541)	/ 2 )
=	164.930083	/	4487.43
=	3.68 %

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	))
=	5981.217	-	1076.095	-	( 393.803	-	max(0, 1621.178	-	2726.166	+	393.803	))
=	4511.319

	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	))
=	5844.175	-	1168.075	-	( 212.559	-	max(0, 1828.541	-	2391.115	+	212.559	))
=	4463.541

Huidanitary Ware Co'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: Mar. 2024 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	94.832 * ( 1 - 12.6% )	/	( (4051.109	+	4193.119)	/ 2 )
=	82.883168	/	4122.114
=	2.01 %

where

	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	))
=	5755.042	-	1106.51	-	( 597.423	-	max(0, 1713.051	-	2962.489	+	597.423	))
=	4051.109

	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	))
=	5641.459	-	1016.761	-	( 431.579	-	max(0, 1572.289	-	2579.067	+	431.579	))
=	4193.119

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

Huidanitary Ware Co (SHSE:603385) 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, Huidanitary Ware Co's WACC % is 10.03%. Huidanitary Ware Co's ROC % is 3.66% (calculated using TTM income statement data). Huidanitary Ware 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.

Huidanitary Ware Co ROC % Related Terms

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Huidanitary Ware Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Huida Sanitary Ware Co Ltd (SHSE:603385) » Definitions » ROC %

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Address

No. 7, Huida Road, Huida Ceramic World, Huanggezhuang Town, Fengnan District, Hebei Province, Tangshan City, CHN, 063307

Website

http://www.huidagroup.com

Huida Sanitary Ware Co Ltd is a Chinese company engaged in the production and sale of sanitary ceramics products, architectural ceramics, and sanitary ware sanitary ware accessories. It offers products such as sanitary wares, bath cabinets, wall tiles, the plastic fittings, washbasin, faucets, electronic products, the bathtub and the hardware fittings. The entity offers its products to the clients all over the world.

Executives

Wang Jia	Director
Zhang Chun Yu	Directors, senior managers
Yin Kang	Director
Wang Yan Qing	Director
Wang Yan Wei	Director
Wang Hui Wen	Director
Du Guo Feng	Director
Dong Hua Zhong	Director
Yang Chun	senior management

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