ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Kato Works Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was -2.34%.
As of today (2026-07-03), Kato Works Co's WACC % is 2.96%. Kato Works Co's ROC % is -2.78% (calculated using TTM income statement data).
Kato Works Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Kato Works Co (TSE:6390) 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, Kato Works Co's WACC % is 2.96%. Kato Works Co's ROC % is -2.78% (calculated using TTM income statement data).
Kato Works 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.
Kato Works Co ROC % Related Terms
Kato Works Co ROC % Historical Data
* Premium members only.
The historical data trend for Kato Works 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.
Kato Works Co (TSE:6390) has a ROC % of -2.34% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Kato Works Co and its competitors.
Is Kato Works Co's ROC % too high?
Kato Works Co's current ROC % is -2.34%. Overall, Kato Works Co has a GF Score™ of 57/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Kato Works Co's ROC % compare to CAT and DE?
Kato Works Co's ROC % of -2.34% can be compared against companies in the Farm & Heavy Construction Machinery industry. The industry median ROC % is 5.56. 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 Farm & Heavy Construction Machinery company?
The median ROC % among Farm & Heavy Construction Machinery companies is 5.56, based on 208 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. 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 Kato Works Co and its competitors. For the Farm & Heavy Construction Machinery industry, the median ROC % is 5.56 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Kato Works Co's current ROC % is -2.34%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Kato Works Co stock overvalued right now?
Based on GuruFocus' analysis, Kato Works Co (TSE:6390) is currently considered Fairly Valued. The stock's GF Value™ is 円1,345.13, compared to a current price of 円1,256.00 — trading 6.6% below its estimated fair value. The current ROC % is -2.34%. Kato Works Co's overall GF Score™ is 57/100 with 5 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 Kato Works Co (TSE:6390), the current ROC % is -2.34% 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 Kato Works Co (TSE:6390) Overvalued in 2026?
Based on GuruFocus' analysis, Kato Works Co stock appears to be undervalued.
The current stock price of 円1,256.00 is trading 6.6% below its estimated GF Value™ of 円1,345.13.
GuruFocus considers Kato Works Co to be Fairly Valued.
Key valuation signals for TSE:6390:
ROC %: -2.34%
GF Value™: 円1,345.13 vs. price of 円1,256.00 (6.6% below fair value)
No single metric tells the full story. See the TSE:6390 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Kato Works Co Ltd is a Japan-based machinery manufacturer. The company is mainly engaged in the manufacturing and sales of machinery used for the lifting and construction industries. It offers various construction equipment, mobile cranes, and industrial equipment, including truck cranes, hydraulic excavators, rough terrain cranes, all-terrain cranes, crawler cranes, mini excavators, earth boring rigs, vacuum trucks, street sweepers, and snow sweepers. Kato also offers related spare parts and services. The group's reportable segments are Japan, which is its key revenue-generating market, China, Europe, and Others.
57GF Score
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