GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » MeganTop Co., Ltd. (TSE:7541) » Definitions » ROC %

MeganTop Co., (TSE:7541) ROC % : 18.70% (As of Mar. 2013)


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

What is MeganTop 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 %. MeganTop Co.,'s annualized return on capital (ROC %) for the quarter that ended in Mar. 2013 was 18.70%.

As of today (2024-05-27), MeganTop Co.,'s WACC % is 0.00%. MeganTop Co.,'s ROC % is 0.00% (calculated using TTM income statement data). MeganTop Co., earns returns that do not match up to its cost of capital. It will destroy value as it grows.

MeganTop Co., ROC % Historical Data

The historical data trend for MeganTop 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.

* Premium members only.

MeganTop Co., ROC % Chart

MeganTop Co., Annual Data
Trend Mar09 Mar10 Mar11 Mar12
ROC %
10.68 9.99 10.47 16.10

MeganTop Co., Quarterly Data
Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13
ROC % Get a 7-Day Free Trial Premium Member Only 7.13 17.43 23.46 15.28 18.70

MeganTop Co., ROC % Calculation

MeganTop Co.,'s annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2012 is calculated as:

ROC % (A: Mar. 2012 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Mar. 2011 ) + Invested Capital (A: Mar. 2012 ))/ count )
=8830.123 * ( 1 - 46.14% )/( (29037.231 + 30046.946)/ 2 )
=4755.9042478/29542.0885
=16.10 %

where

Invested Capital(A: Mar. 2011 )
=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))
=29982.266 - 0 - ( 2867.32 - max(0, 9708.403 - 10653.438+2867.32))
=29037.231

Invested Capital(A: Mar. 2012 )
=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))
=34376.399 - 808.296 - ( 6388.778 - max(0, 10987.309 - 14508.466+6388.778))
=30046.946

MeganTop Co.,'s annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2013 is calculated as:

ROC % (Q: Mar. 2013 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2012 ) + Invested Capital (Q: Mar. 2013 ))/ count )
=9357.988 * ( 1 - 41.17% )/( (29169.866 + 29702.59)/ 2 )
=5505.3043404/29436.228
=18.70 %

where

Invested Capital(Q: Dec. 2012 )
=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))
=34785.12 - 1908.268 - ( 5152.099 - max(0, 10341.317 - 14048.303+5152.099))
=29169.866

Invested Capital(Q: Mar. 2013 )
=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))
=35709.249 - 876.889 - ( 6596.067 - max(0, 9919.163 - 15048.933+6596.067))
=29702.59

Note: The Operating Income data used here is four times the quarterly (Mar. 2013) data.

* 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.

MeganTop Co.,  (TSE:7541) 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, MeganTop Co.,'s WACC % is 0.00%. MeganTop Co.,'s ROC % is 0.00% (calculated using TTM income statement data). MeganTop 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.

MeganTop Co., ROC % Related Terms

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

MeganTop Co., (TSE:7541) Headlines

No Headlines