Hangzhou Everfine Photo-e-info Co (SZSE:300306) ROC % : 10.02% (As of Sep. 2024)

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What is Hangzhou Everfine Photo-e-info 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 %. Hangzhou Everfine Photo-e-info Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 10.02%.

As of today (2024-12-12), Hangzhou Everfine Photo-e-info Co's WACC % is 8.14%. Hangzhou Everfine Photo-e-info Co's ROC % is 10.82% (calculated using TTM income statement data). Hangzhou Everfine Photo-e-info 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.

Hangzhou Everfine Photo-e-info Co ROC % Historical Data

The historical data trend for Hangzhou Everfine Photo-e-info 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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Hangzhou Everfine Photo-e-info Co ROC % Chart

Hangzhou Everfine Photo-e-info Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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9.65

13.36

10.87

8.75

10.43

Hangzhou Everfine Photo-e-info 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															8.45	18.07	3.94	11.05	10.02

Hangzhou Everfine Photo-e-info Co ROC % Calculation

Hangzhou Everfine Photo-e-info 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 )
=	80.537 * ( 1 - 5.07% )	/	( (774.873	+	691.212)	/ 2 )
=	76.4537741	/	733.0425
=	10.43 %

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	))
=	1694.605	-	73.564	-	( 846.168	-	max(0, 173.878	-	1121.85	+	846.168	))
=	774.873

	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	))
=	1707.576	-	53.397	-	( 962.967	-	max(0, 168.048	-	1185.516	+	962.967	))
=	691.212

Hangzhou Everfine Photo-e-info 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 )
=	68.452 * ( 1 - 1.52% )	/	( (678.733	+	666.409)	/ 2 )
=	67.4115296	/	672.571
=	10.02 %

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	))
=	1641.8	-	44.492	-	( 918.575	-	max(0, 144.563	-	1134.807	+	918.575	))
=	678.733

	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	))
=	1685.161	-	66.137	-	( 952.615	-	max(0, 167.356	-	1169.194	+	952.615	))
=	666.409

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

Hangzhou Everfine Photo-e-info Co (SZSE:300306) 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, Hangzhou Everfine Photo-e-info Co's WACC % is 8.14%. Hangzhou Everfine Photo-e-info Co's ROC % is 10.82% (calculated using TTM income statement data). Hangzhou Everfine Photo-e-info 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.

Hangzhou Everfine Photo-e-info Co ROC % Related Terms

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Hangzhou Everfine Photo-e-info Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Hangzhou Everfine Photo-e-info Co Ltd (SZSE:300306) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

669, Binkang Road, Binjiang Hi-Tech Zone, Hangzhou, CHN, 310053

Website

http://www.everfine.cn

Hangzhou Everfine Photo-e-info Co Ltd operates in the light-emitting diode (LED) module and lighting industry. The company offers LED and lighting measurement, vehicle and airborne display, backlight and LCM module, optical instruments, ultraviolet spectrometer, EMC measurement device and electronic testers. The products have been exported to the United States, Europe, Japan and other developed countries and regions.

Executives

Min Fang Sheng	Supervisors
Lu Jie	Director
Zou Jian Jun	Director
Zhang Wei	Supervisors
Hu Hong Ying	Director
Meng Zheng	Director
Li Qian	Supervisors

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