SoftwareONE Holding AG (SoftwareONE Holding AG) ROC % : -9.42% (As of Dec. 2023)

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What is SoftwareONE Holding 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 %. SoftwareONE Holding AG's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -9.42%.

As of today (2024-06-07), SoftwareONE Holding AG's WACC % is 8.64%. SoftwareONE Holding AG's ROC % is 2.82% (calculated using TTM income statement data). SoftwareONE Holding AG earns returns that do not match up to its cost of capital. It will destroy value as it grows.

SoftwareONE Holding AG ROC % Historical Data

The historical data trend for SoftwareONE Holding 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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SoftwareONE Holding AG ROC % Chart

SoftwareONE Holding AG Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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13.50

12.33

7.88

43.61

3.06

SoftwareONE Holding AG Semi-Annual Data
	Dec16	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial									6.12	2.76	2.36	5.85	-9.42

SoftwareONE Holding AG ROC % Calculation

SoftwareONE Holding AG'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 )
=	123.689 * ( 1 - 65.67% )	/	( (1268.009	+	1510.947)	/ 2 )
=	42.4624337	/	1389.478
=	3.06 %

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	))
=	3702.315	-	2291.176	-	( 421.837	-	max(0, 2595.467	-	2738.597	+	421.837	))
=	1268.009

	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	))
=	4375.452	-	2902.375	-	( 387.516	-	max(0, 3346.726	-	3308.856	+	387.516	))
=	1510.947

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

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	111.122 * ( 1 - 231.05% )	/	( (1579.426	+	1510.947)	/ 2 )
=	-145.625381	/	1545.1865
=	-9.42 %

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	))
=	4517.189	-	2844.374	-	( 308.888	-	max(0, 3444.96	-	3538.349	+	308.888	))
=	1579.426

	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	))
=	4375.452	-	2902.375	-	( 387.516	-	max(0, 3346.726	-	3308.856	+	387.516	))
=	1510.947

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

SoftwareONE Holding AG (OTCPK:SWONF) 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, SoftwareONE Holding AG's WACC % is 8.64%. SoftwareONE Holding AG's ROC % is 2.82% (calculated using TTM income statement data). SoftwareONE Holding 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.

SoftwareONE Holding AG ROC % Related Terms

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SoftwareONE Holding AG (SoftwareONE Holding AG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » SoftwareONE Holding AG (OTCPK:SWONF) » Definitions » ROC %

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SWONz:UK SWONE:Switzerland SWON:Switzerland

Address

Riedenmatt 4, Stans, CHE, CH-6370

Website

https://www.softwareone.com

SoftwareONE Holding AG is engaged in providing cloud technology solutions. It generates its revenue from Software and Cloud Marketplace by arranging software license agreements between software providers and end customers and managing cloud subscriptions for them (point in time). Revenue from Software and Cloud Services is generated by providing services to customers (over time), the sale of on-premise software only used to provide software asset management solutions and the resale or sale of self-developed on-premise software. Switzerland, the United States, Germany, and the Netherlands are the main geographical markets for the company.

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