TH International (TH International) ROC % : -16.72% (As of Mar. 2024)

View and export this data going back to 2022. Start your Free Trial

What is TH International 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 %. TH International's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -16.72%.

As of today (2024-06-13), TH International's WACC % is 4.23%. TH International's ROC % is -19.36% (calculated using TTM income statement data). TH International earns returns that do not match up to its cost of capital. It will destroy value as it grows.

TH International ROC % Historical Data

The historical data trend for TH International'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.

TH International ROC % Chart

TH International Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

-42.21

-60.11

-30.27

-21.29

TH International Quarterly Data
	Dec19	Dec20	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial									-17.59	-22.93	-17.50	-19.76	-16.72

TH International ROC % Calculation

TH International'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 )
=	-80.299 * ( 1 - -0.01% )	/	( (392.522	+	362.013)	/ 2 )
=	-80.3070299	/	377.2675
=	-21.29 %

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	))
=	378.962	-	61.236	-	( 88.202	-	max(0, 189.088	-	114.292	+	88.202	))
=	392.522

	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	))
=	310.277	-	79.522	-	( 31.792	-	max(0, 195.489	-	64.231	+	31.792	))
=	362.013

TH International's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-60.224 * ( 1 - 0% )	/	( (362.013	+	358.184)	/ 2 )
=	-60.224	/	360.0985
=	-16.72 %

where

	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	))
=	310.277	-	79.522	-	( 31.792	-	max(0, 195.489	-	64.231	+	31.792	))
=	362.013

	Invested Capital		(Q: Mar. 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	))
=	283.195	-	64.567	-	( 30.296	-	max(0, 202.151	-	62.595	+	30.296	))
=	358.184

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

TH International (NAS:THCH) 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, TH International's WACC % is 4.23%. TH International's ROC % is -19.36% (calculated using TTM income statement data). TH International 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.

TH International ROC % Related Terms

Thank you for viewing the detailed overview of TH International's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

TH International (TH International) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » TH International Ltd (NAS:THCH) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

227 Huangpi North Road, 2501 Central Plaza, Shanghai, CHN, 200003

Website

https://www.timschina.com

TH International Ltd is the parent company of the franchise of Tim Hortons coffee shops for Restaurant Brands International Inc. It is an emerging coffee champion in China. It builds coffee and bake shop in mainland China. Through its Tim Hortons brand, the firm offers freshly brewed coffee, tea, and other beverages, bakery & sides, and sandwiches. The Company's revenue is derived from operations in the PRC.