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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Denka Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 3.87%.
As of today (2026-07-22), Denka Co's WACC % is 2.93%. Denka Co's ROC % is 2.42% (calculated using TTM income statement data).
Denka Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Denka Co (TSE:4061) 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, Denka Co's WACC % is 2.93%. Denka Co's ROC % is 2.42% (calculated using TTM income statement data).
Denka 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.
Denka Co ROC % Related Terms
Denka Co ROC % Historical Data
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The historical data trend for Denka 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.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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.
Denka Co (TSE:4061) has a ROC % of 3.87% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Denka Co and its competitors.
Is Denka Co's ROC % too high?
Denka Co's current ROC % is 3.87%. The Chemicals industry median ROC % is 4.48. Denka Co's value of 3.87% is 13.6% below this industry median. Overall, Denka Co has a GF Score™ of 60/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Denka Co's ROC % compare to DOW?
Denka Co's ROC % of 3.87% can be compared against companies in the Chemicals industry. The industry median ROC % is 4.48. Denka Co's value of 3.87% is 13.6% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Chemicals company?
The median ROC % among Chemicals companies is 4.48, based on 1,578 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Denka Co's current ROC % of 3.87% is 13.6% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Denka Co and its competitors. For the Chemicals industry, the median ROC % is 4.48 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Denka Co's current ROC % is 3.87%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Denka Co stock overvalued right now?
Based on GuruFocus' analysis, Denka Co (TSE:4061) is currently considered Significantly Overvalued. The stock's GF Value™ is 円2,365.00, compared to a current price of 円3,684.00 — trading 55.8% above its estimated fair value. The current ROC % is 3.87% and 13.6% below the Chemicals industry median of 4.48. Denka Co's overall GF Score™ is 60/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Denka Co (TSE:4061), the current ROC % is 3.87% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Denka Co (TSE:4061) Overvalued in 2026?
Based on GuruFocus' analysis, Denka Co stock appears to be overvalued.
The current stock price of 円3,684.00 is trading 55.8% above its estimated GF Value™ of 円2,365.00.
GuruFocus considers Denka Co to be Significantly Overvalued.
Key valuation signals for TSE:4061:
ROC %: 3.87%
GF Value™: 円2,365.00 vs. price of 円3,684.00 (55.8% above fair value)
Industry Position: 13.6% below the Chemicals median
No single metric tells the full story. See the TSE:4061 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Denka Co Ltd manufactures and sells chemicals, plastics, and chemical-based products. The firm organizes itself into four segments based on product type. The elastomers and performance plastics segment, which generates more revenue than any other segment, sells rubber products used by the automotive industry and plastics used to manufacture electronics including televisions. The infrastructure and social solutions segment sells cement and fertilizer to the construction and building industries. The electronics and innovative products segment sells film, and resins used by the electronics industry. The life science and environment products segment sells housing materials including rain gutters, plastic food packaging materials, and industrial materials including electrical tape.
60GF Score
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