ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Seven & i Holdings Co's annualized return on capital (ROC %) for the quarter that ended in Aug. 2024 was 3.03%.
As of today (2024-12-15), Seven & i Holdings Co's WACC % is 1.44%. Seven & i Holdings Co's ROC % is 3.13% (calculated using TTM income statement data).
Seven & i Holdings 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.
* 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.
Note:
The Operating Income data used here is four times the quarterly (Aug. 2024) data.
* 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.
Seven & i Holdings Co (OTCPK:SVNDF) 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, Seven & i Holdings Co's WACC % is 1.44%. Seven & i Holdings Co's ROC % is 3.13% (calculated using TTM income statement data).
Seven & i Holdings 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.
Seven & i Holdings Co ROC % Related Terms
Thank you for viewing the detailed overview of Seven & i Holdings Co's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Seven & i Holdings operates 7-Eleven, the world's largest convenience store chain, with more than 84,000 stores, including nearly 49,000 operated by licensees globally. Convenience stores, mainly in Japan and North America, represent 86% of group sales (81% of operating revenue) and around 90% of operating profits. 7-Eleven Japan, the market leader in Japan's convenience store industry, has acquired 46% value share and 38% share in store count. 7-Eleven, the largest convenience store chain in the US, made a $21 billion acquisition of Speedway in 2020. The deal increased its total store count to more than 13,000. Other retail includes superstores and specialty retailers, both of which have low margins. The financial business, mainly ATM operations, is another key profit contributor.
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