Japan Prime Realty Investment (TSE:8955) ROC % : 3.26% (As of Dec. 2023)

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What is Japan Prime Realty Investment 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 %. Japan Prime Realty Investment's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 3.26%.

As of today (2024-06-08), Japan Prime Realty Investment's WACC % is 1.59%. Japan Prime Realty Investment's ROC % is 3.43% (calculated using TTM income statement data). Japan Prime Realty Investment generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Japan Prime Realty Investment ROC % Historical Data

The historical data trend for Japan Prime Realty Investment'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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Japan Prime Realty Investment ROC % Chart

Japan Prime Realty Investment Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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3.57

3.63

3.61

3.80

3.46

Japan Prime Realty Investment Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															3.60	3.81	3.80	3.58	3.26

Japan Prime Realty Investment ROC % Calculation

Japan Prime Realty Investment'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 )
=	17011.283 * ( 1 - 0.01% )	/	( (487308.43	+	496040.171)	/ 2 )
=	17009.5818717	/	491674.3005
=	3.46 %

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	))
=	507655.447	-	4609.585	-	( 33127.007	-	max(0, 30524.479	-	46261.911	+	33127.007	))
=	487308.43

	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	))
=	510802.543	-	4580.678	-	( 27775.89	-	max(0, 30511.391	-	40693.085	+	27775.89	))
=	496040.171

Japan Prime Realty Investment's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	16303.436 * ( 1 - 0.01% )	/	( (503377.445	+	496040.171)	/ 2 )
=	16301.8056564	/	499708.808
=	3.26 %

where

	Invested Capital		(Q: Jun. 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	))
=	510069.681	-	3819.228	-	( 27056.051	-	max(0, 37214.891	-	40087.899	+	27056.051	))
=	503377.445

	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	))
=	510802.543	-	4580.678	-	( 27775.89	-	max(0, 30511.391	-	40693.085	+	27775.89	))
=	496040.171

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Japan Prime Realty Investment (TSE:8955) 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, Japan Prime Realty Investment's WACC % is 1.59%. Japan Prime Realty Investment's ROC % is 3.43% (calculated using TTM income statement data). Japan Prime Realty Investment generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

Japan Prime Realty Investment ROC % Related Terms

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Japan Prime Realty Investment (TSE:8955) Business Description

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GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Japan Prime Realty Investment Corp (TSE:8955) » Definitions » ROC %

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58JA:Germany

Address

4-16 Yaesu, 1-Chome, Chuo-ku, Tokyo, JPN, 103-0028

Website

http://www.jpr-reit.co.jp

Japan Prime Realty Investment Corporation, or JPR, is a Japanese real estate investment trust primarily involved in the ownership of properties in the Greater Tokyo region. Most of JPR's real estate portfolio is comprised of office buildings, with retail properties making up the rest of the company's holdings. The vast majority of JPR's assets are in the Tokyo metropolitan area, which are mostly concentrated in Central Tokyo. The company generates nearly all of its revenue through collecting funds from investors, investing that money into real estate properties, and then collecting rental income from those properties. Its collection of tenants is fairly evenly distributed among service, information and communication, manufacturing, finance, retail, and real estate companies.

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