Guangdong Feinan Resources Recycling Co (SZSE:301500) ROC % : 7.20% (As of Sep. 2024)

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What is Guangdong Feinan Resources Recycling 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 %. Guangdong Feinan Resources Recycling Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 7.20%.

As of today (2024-12-11), Guangdong Feinan Resources Recycling Co's WACC % is 7.43%. Guangdong Feinan Resources Recycling Co's ROC % is 5.66% (calculated using TTM income statement data). Guangdong Feinan Resources Recycling Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Guangdong Feinan Resources Recycling Co ROC % Historical Data

The historical data trend for Guangdong Feinan Resources Recycling 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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Guangdong Feinan Resources Recycling Co ROC % Chart

Guangdong Feinan Resources Recycling Co Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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37.86

27.95

20.93

6.31

3.00

Guangdong Feinan Resources Recycling Co Quarterly Data
	Dec17	Dec18	Dec19	Jun20	Dec20	Jun21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial													3.63	0.10	0.05	14.02	7.20

Guangdong Feinan Resources Recycling Co ROC % Calculation

Guangdong Feinan Resources Recycling 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 )
=	229.338 * ( 1 - -1.88% )	/	( (6962.274	+	8620.12)	/ 2 )
=	233.6495544	/	7791.197
=	3.00 %

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	))
=	7588.934	-	1182.695	-	( 213.742	-	max(0, 3353.693	-	2797.658	+	213.742	))
=	6962.274

	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	))
=	10605.513	-	1600.085	-	( 385.308	-	max(0, 3871.482	-	4383.33	+	385.308	))
=	8620.12

Guangdong Feinan Resources Recycling 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 )
=	735.372 * ( 1 - -0.04% )	/	( (10049.287	+	10390.673)	/ 2 )
=	735.6661488	/	10219.98
=	7.20 %

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	))
=	11870.626	-	1936.139	-	( 684.763	-	max(0, 5239.225	-	5124.425	+	684.763	))
=	10049.287

	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	))
=	12271.14	-	1785.784	-	( 1082.2	-	max(0, 5388.554	-	5483.237	+	1082.2	))
=	10390.673

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

Guangdong Feinan Resources Recycling Co (SZSE:301500) 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, Guangdong Feinan Resources Recycling Co's WACC % is 7.43%. Guangdong Feinan Resources Recycling Co's ROC % is 5.66% (calculated using TTM income statement data). Guangdong Feinan Resources Recycling 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.

Guangdong Feinan Resources Recycling Co ROC % Related Terms

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Guangdong Feinan Resources Recycling Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Waste Management » Guangdong Feinan Resources Recycling Co Ltd (SZSE:301500) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

No. 3-6, Dachong Section, Guihe Road, Lishui Town, Nanhai, Guangdong, Foshan, CHN, 526233

Website

https://www.feinanresources.com

Guangdong Feinan Resources Recycling Co Ltd is mainly engaged in the disposal of non-ferrous metal hazardous waste and the recycling of renewable resources. It is an environmental protection enterprise covering hazardous waste collection, harmless disposal, and resource recycling. The company applies traditional metallurgical technology to the non-ferrous metal hazardous waste disposal and utilization business. It can combine different batches of hazardous waste with low metal grade and different impurity content with copper-containing materials and adopt leading process technology to ultimately produce electrolytic copper, and ice Copper, anode slime and other resource-based products can truly realize resource regeneration and turn waste into treasure.

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