Housei (TSE:5035) ROC % : -5.71% (As of Jun. 2024)

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What is Housei 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 %. Housei's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -5.71%.

As of today (2025-03-17), Housei's WACC % is 6.30%. Housei's ROC % is 0.60% (calculated using TTM income statement data). Housei earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Housei ROC % Historical Data

The historical data trend for Housei'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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Housei ROC % Chart

Housei Annual Data

Trend

Dec20

Dec21

Dec22

Dec23

ROC %

8.83

8.23

4.93

3.27

Housei Quarterly Data
	Dec20	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24
ROC %	Get a 7-Day Free Trial							0.32	1.50	5.11	1.16	-5.71

Housei ROC % Calculation

Housei'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 )
=	155.784 * ( 1 - 35.38% )	/	( (2441.448	+	3723.916)	/ 2 )
=	100.6676208	/	3082.682
=	3.27 %

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	))
=	4227.402	-	210.402	-	( 1575.552	-	max(0, 725.668	-	2860.358	+	1575.552	))
=	2441.448

	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	))
=	4716.648	-	162.358	-	( 830.374	-	max(0, 1135.984	-	3083.309	+	830.374	))
=	3723.916

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

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2024 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-243.68 * ( 1 - 9.98% )	/	( (3752.054	+	3936.089)	/ 2 )
=	-219.360736	/	3844.0715
=	-5.71 %

where

	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	))
=	5344.814	-	352.318	-	( 1240.442	-	max(0, 1553.635	-	3243.346	+	1240.442	))
=	3752.054

	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	))
=	5196.706	-	165.365	-	( 1095.252	-	max(0, 1550.908	-	3046.153	+	1095.252	))
=	3936.089

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

Housei (TSE:5035) 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, Housei's WACC % is 6.30%. Housei's ROC % is 0.60% (calculated using TTM income statement data). Housei 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.

Housei ROC % Related Terms

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Housei Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Housei Inc (TSE:5035) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

1-8 Tsukudo-cho, 9th floor, Kagurazaka AK Building, Shinjuku-ku, Tokyo, JPN, 162-0821

Website

https://www.housei-inc.com

Housei Inc predominantly operates in the information technology sector. The company is engaged in various business activities such as the development, operation, and maintenance of information systems for the media, manufacturing, and finance industries, the provision of in-house developed information systems, software and cloud services (Product Promotion Business), and the sale of Japanese products to Chinese consumers and the provision of cloud services for this purpose (Crossborder E-commerce Business). In addition, the company also provides IT services and IP brokerage in the entertainment industry. Its reportable segments are the Information Systems Business, which derives maximum revenue, and the Cross-border E-commerce business.

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