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Shenzhen Lions King Hi Tech Co (SZSE:301305) ROC % : 9.00% (As of Sep. 2024)


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What is Shenzhen Lions King Hi Tech 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 %. Shenzhen Lions King Hi Tech Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 9.00%.

As of today (2024-12-14), Shenzhen Lions King Hi Tech Co's WACC % is 8.30%. Shenzhen Lions King Hi Tech Co's ROC % is 7.58% (calculated using TTM income statement data). Shenzhen Lions King Hi Tech Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Shenzhen Lions King Hi Tech Co ROC % Historical Data

The historical data trend for Shenzhen Lions King Hi Tech 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.

* Premium members only.

Shenzhen Lions King Hi Tech Co ROC % Chart

Shenzhen Lions King Hi Tech Co Annual Data
Trend Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROC %
Get a 7-Day Free Trial 5.98 8.31 9.89 9.70 7.62

Shenzhen Lions King Hi Tech Co Quarterly Data
Dec18 Dec19 Dec20 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
ROC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.90 7.29 4.73 9.50 9.00

Shenzhen Lions King Hi Tech Co ROC % Calculation

Shenzhen Lions King Hi Tech 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 )
=295.027 * ( 1 - -1.21% )/( (3647.607 + 4188.362)/ 2 )
=298.5968267/3917.9845
=7.62 %

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))
=4459.33 - 335.906 - ( 475.817 - max(0, 517.965 - 1103.101+475.817))
=3647.607

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))
=5956.419 - 368.178 - ( 1399.879 - max(0, 583.472 - 2355.401+1399.879))
=4188.362

Shenzhen Lions King Hi Tech 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 )
=424.208 * ( 1 - 4.95% )/( (4500.587 + 4460.635)/ 2 )
=403.209704/4480.611
=9.00 %

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))
=6403.887 - 314.072 - ( 1770.591 - max(0, 1044.241 - 2633.469+1770.591))
=4500.587

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))
=5959.488 - 337.751 - ( 1161.102 - max(0, 575.452 - 2048.068+1161.102))
=4460.635

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

Shenzhen Lions King Hi Tech Co  (SZSE:301305) 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, Shenzhen Lions King Hi Tech Co's WACC % is 8.30%. Shenzhen Lions King Hi Tech Co's ROC % is 7.58% (calculated using TTM income statement data). Shenzhen Lions King Hi Tech 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.

Shenzhen Lions King Hi Tech Co ROC % Related Terms

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Shenzhen Lions King Hi Tech Co Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Industrials » Waste Management » Shenzhen Lions King Hi Tech Co Ltd (SZSE:301305) » Definitions » ROC %
Comparable Companies
SZSE:002973 SZSE:000826 SZSE:300388 SHSE:688087 SZSE:301127 SZSE:300867 SZSE:301519 SZSE:300187 SZSE:301372 SHSE:688370 WM RSG WCN XPAR:VIE GFL CLH XMAD:FCC CWST SHSE:603568 SZSE:002340
Traded in Other Exchanges
N/A
Address
Pingqiao Road, Pingdi Street, Floor 13, No. 2, Gaoqiao Community, Longgang District, Guangdong Province, Shenzhen, CHN, 518117
Website
https://www.leoking.com
Shenzhen Lions King Hi Tech Co Ltd is engaged in the Harmless treatment and resource utilization of organic solid waste (catering waste, kitchen waste, excrement, animal solid waste, etc.) and urban domestic waste, as well as the provision of related environmental engineering services.
Executives
Chen Jian Xiang Directors, executives

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