Medinet Co (TSE:2370) ROC % : -122.74% (As of Mar. 2024)

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What is Medinet 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 %. Medinet Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -122.74%.

As of today (2024-06-20), Medinet Co's WACC % is 5.91%. Medinet Co's ROC % is -115.44% (calculated using TTM income statement data). Medinet Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Medinet Co ROC % Historical Data

The historical data trend for Medinet 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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Medinet Co ROC % Chart

Medinet Co Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

ROC %

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-66.28

-63.09

-83.80

-106.54

-119.21

Medinet Co Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															-107.68	-110.32	-123.53	-103.28	-122.74

Medinet Co ROC % Calculation

Medinet Co's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2023 is calculated as:

	ROC % (A: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2022 )	+	Invested Capital (A: Sep. 2023 ))	/ count )
=	-1425.952 * ( 1 - -0.29% )	/	( (1372.24	+	1027.008)	/ 2 )
=	-1430.0872608	/	1199.624
=	-119.21 %

where

	Invested Capital		(A: Sep. 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	))
=	6078.061	-	206.726	-	( 4499.095	-	max(0, 279.313	-	4807.47	+	4499.095	))
=	1372.24

	Invested Capital		(A: Sep. 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	))
=	5634.145	-	210.804	-	( 4396.333	-	max(0, 346.838	-	4768.828	+	4396.333	))
=	1027.008

Medinet Co'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 )
=	-1459.392 * ( 1 - -0.31% )	/	( (1254.663	+	1130.695)	/ 2 )
=	-1463.9161152	/	1192.679
=	-122.74 %

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	))
=	6348.677	-	60.871	-	( 5033.143	-	max(0, 272.895	-	5393.515	+	5033.143	))
=	1254.663

	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	))
=	6100.265	-	68.283	-	( 4901.287	-	max(0, 256.745	-	5206.551	+	4901.287	))
=	1130.695

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

Medinet Co (TSE:2370) 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, Medinet Co's WACC % is 5.91%. Medinet Co's ROC % is -115.44% (calculated using TTM income statement data). Medinet 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.

Medinet Co ROC % Related Terms

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Medinet Co (TSE:2370) Business Description

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GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Medinet Co Ltd (TSE:2370) » Definitions » ROC %

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Address

2-3-12 Shin-Yokohama, Shin-Yokohama Square Building, 14 Floor, Kohoku-ku, Yokohama, JPN, 222-0033

Website

http://www.medinet-inc.co.jp

Medinet Co Ltd is a Japan-based Contract Development and Manufacturing Organization (CDMO). The company is engaged in the research and development of regenerative medical products, investigational products, and specified cell products. MEDINET is a one-stop regenerative medicine and cell therapy solution provider. It provides value chain solutions including personnel training, facility and equipment design, facility operations and management, preparation of standard operating procedures, logistics network, information system, purchasing and production management, quality management solutions to medical institutions, research institutions, and biopharmaceutical companies.

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