Yuan Longping High-tech Agriculture Co (SZSE:000998) ROC % : -7.94% (As of Sep. 2024)

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What is Yuan Longping High-tech Agriculture 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 %. Yuan Longping High-tech Agriculture Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -7.94%.

As of today (2024-12-11), Yuan Longping High-tech Agriculture Co's WACC % is 8.52%. Yuan Longping High-tech Agriculture Co's ROC % is 5.92% (calculated using TTM income statement data). Yuan Longping High-tech Agriculture Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Yuan Longping High-tech Agriculture Co ROC % Historical Data

The historical data trend for Yuan Longping High-tech Agriculture 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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Yuan Longping High-tech Agriculture Co ROC % Chart

Yuan Longping High-tech Agriculture Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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2.79

2.83

1.65

6.53

5.08

Yuan Longping High-tech Agriculture Co Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															-12.05	28.35	4.86	-2.95	-7.94

Yuan Longping High-tech Agriculture Co ROC % Calculation

Yuan Longping High-tech Agriculture 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 )
=	1180.674 * ( 1 - -3.33% )	/	( (22537.332	+	25512.775)	/ 2 )
=	1219.9904442	/	24025.0535
=	5.08 %

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	))
=	23112.027	-	2452.384	-	( 3608.755	-	max(0, 11182.307	-	9304.618	+	3608.755	))
=	22537.332

	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	))
=	27747.979	-	2902.87	-	( 4436.813	-	max(0, 12675.691	-	12008.025	+	4436.813	))
=	25512.775

Yuan Longping High-tech Agriculture Co's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	-2202.76 * ( 1 - 11.39% )	/	( (23413.65	+	25770.078)	/ 2 )
=	-1951.865636	/	24591.864
=	-7.94 %

where

	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	))
=	25428.35	-	1650.304	-	( 2807.716	-	max(0, 10128.543	-	10492.939	+	2807.716	))
=	23413.65

	Invested Capital		(Q: Sep. 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	))
=	26278.957	-	1487.235	-	( 3728.689	-	max(0, 12160.919	-	11182.563	+	3728.689	))
=	25770.078

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

Yuan Longping High-tech Agriculture Co (SZSE:000998) 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, Yuan Longping High-tech Agriculture Co's WACC % is 8.52%. Yuan Longping High-tech Agriculture Co's ROC % is 5.92% (calculated using TTM income statement data). Yuan Longping High-tech Agriculture 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.

Yuan Longping High-tech Agriculture Co ROC % Related Terms

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Yuan Longping High-tech Agriculture Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Yuan Longping High-tech Agriculture Co Ltd (SZSE:000998) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

No. 638, Heping Road, Furong District, Hunan Province, Changsha, CHN, 410125

Website

http://www.lpht.com.cn

Yuan Longping High-tech Agriculture Co Ltd is a China-based company engaged in the research, production, and sale of seeds, hybrid rice, pepper, corn, cotton, and vegetables. In addition, the company also provides agricultural services like precision planting technology, new professional peasant training, quality grain trading platform, cultivated land rehabilitation and development, brand agriculture, and agricultural finance. The company creates an agricultural integrated service platform by including peasants, dealers, and other means of agricultural production, finance, and other partners into the integrated service ecological circle.

Executives

Wang Yi Bo	Director
Liao Cui Meng	Directors, executives
Zhang Xiu Kuan	Directors, executives
Tao Yang	Director
Gong Jun Tao	Executives
Sun Wei Hua	Supervisors
Zou Ji Jun	Executives
Long He Ping	Executives
Qi Shao Wu	Director
Peng Guang Jian	Executives
Ma De Hua	Director
Yang Yuan Zhu	Executives
Yuan Ding Jiang	Directors, executives
Wu Yue Shi	Director
Chen Zhi Xin	Secretary Dong

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