METRO AG (STU:B4B) ROC % : -38.39% (As of Sep. 2023)

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What is METRO AG 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 %. METRO AG's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was -38.39%.

As of today (2024-05-16), METRO AG's WACC % is 4.63%. METRO AG's ROC % is 0.42% (calculated using TTM income statement data). METRO AG earns returns that do not match up to its cost of capital. It will destroy value as it grows.

METRO AG ROC % Historical Data

The historical data trend for METRO AG'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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METRO AG ROC % Chart

METRO AG Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

ROC %

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1.47

5.52

-1.13

6.85

0.42

METRO AG Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23
ROC %	Get a 7-Day Free Trial															0.60	15.78	-4.19	9.85	-38.39

METRO AG ROC % Calculation

METRO AG's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2023 is calculated as:

	ROC % (A: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2022 )	+	Invested Capital (A: Sep. 2023 ))	/ count )
=	57 * ( 1 - 27.91% )	/	( (10278	+	9158)	/ 2 )
=	41.0913	/	9718
=	0.42 %

where

	Invested Capital		(A: Sep. 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	))
=	12855	-	4122	-	( 1164	-	max(0, 6677	-	5132	+	1164	))
=	10278

	Invested Capital		(A: 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	))
=	11648	-	3872	-	( 943	-	max(0, 6100	-	4718	+	943	))
=	9158

METRO AG's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-2312 * ( 1 - -52.53% )	/	( (9216	+	9158)	/ 2 )
=	-3526.4936	/	9187
=	-38.39 %

where

	Invested Capital		(Q: Jun. 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	))
=	12029	-	4038	-	( 1170	-	max(0, 6197	-	4972	+	1170	))
=	9216

	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	))
=	11648	-	3872	-	( 943	-	max(0, 6100	-	4718	+	943	))
=	9158

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) data.

METRO AG (STU:B4B) 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, METRO AG's WACC % is 4.63%. METRO AG's ROC % is 0.42% (calculated using TTM income statement data). METRO AG 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.

METRO AG ROC % Related Terms

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METRO AG (STU:B4B) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Retail - Defensive » METRO AG (STU:B4B) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

0RTE:UK B4B:Germany MEO:Austria

Address

Metro-Strasse 1, Dusseldorf, NW, DEU, 40235

Website

https://www.metroag.de

METRO AG operates as a food service company. It is active in the self-service wholesale trade with the brands METRO and MAKRO as well as in the delivery sales with the METRO delivery service, and the supply specialists Classic Fine Foods, Pro a Pro, and Rungis Express. Its business consists of segments which include METRO Germany, METRO Western Europe, METRO Russia, METRO Eastern Europe, and others. The other segment includes Hospitality Digital, the business unit that bundles the group's digitalization initiatives. It also includes service companies that provide group-wide services in the areas of real estate, logistics, information technology, advertising, and procurement.

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