Frontier Real Estate Investment (TSE:8964) ROC % : 4.06% (As of Jun. 2024)

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What is Frontier Real Estate 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 %. Frontier Real Estate Investment's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 4.06%.

As of today (2025-03-24), Frontier Real Estate Investment's WACC % is 1.29%. Frontier Real Estate Investment's ROC % is 3.83% (calculated using TTM income statement data). Frontier Real Estate 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.

Frontier Real Estate Investment ROC % Historical Data

The historical data trend for Frontier Real Estate 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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Frontier Real Estate Investment ROC % Chart

Frontier Real Estate Investment Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec23

ROC %

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3.88

3.80

3.66

3.74

Frontier Real Estate Investment Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															3.91	3.83	3.91	3.60	4.06

Frontier Real Estate Investment ROC % Calculation

Frontier Real Estate 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. 2021 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	12427.131 * ( 1 - 0.01% )	/	( (330426.297	+	334263.971)	/ 2 )
=	12425.8882869	/	332345.134
=	3.74 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	330060.025	-	1178.312	-	( 8100.114	-	max(0, 14256.531	-	12711.947	+	8100.114	))
=	330426.297

	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	))
=	336333.447	-	2389.388	-	( 13528.279	-	max(0, 18808.822	-	18488.91	+	13528.279	))
=	334263.971

Frontier Real Estate Investment'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: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	13571.298 * ( 1 - 0.01% )	/	( (334263.971	+	333582.374)	/ 2 )
=	13569.9408702	/	333923.1725
=	4.06 %

where

	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	))
=	336333.447	-	2389.388	-	( 13528.279	-	max(0, 18808.822	-	18488.91	+	13528.279	))
=	334263.971

	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	))
=	333976.011	-	2406.465	-	( 12771.686	-	max(0, 18943.096	-	16930.268	+	12771.686	))
=	333582.374

Note: The Operating Income data used here is two times the semi-annual (Jun. 2024) data.

Frontier Real Estate Investment (TSE:8964) 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, Frontier Real Estate Investment's WACC % is 1.29%. Frontier Real Estate Investment's ROC % is 3.83% (calculated using TTM income statement data). Frontier Real Estate 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.

Frontier Real Estate Investment ROC % Related Terms

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Frontier Real Estate Investment Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Frontier Real Estate Investment Corp (TSE:8964) » Definitions » ROC %

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Address

Kojun Building, 6th Floor, 6-8-7 Ginza, Chuo-ku, Tokyo, JPN, 104-0061

Website

https://www.frontier-reit.co.jp

Frontier Real Estate Investment Corp is a real estate investment trust specializing in retail facilities. The company mainly invests in commercial buildings in the metropolitan area and local cities. The company aims at stable earnings and steady asset growth from midterm to long-term perspectives. Its property portfolio consists of AEON Shinagawa Seaside Shopping Center, AEON MALL Ibaraki, Papillon Plaza, Kamiikedai Tokyu Store, and Belltown Tambaguchi Eki-mae Store, among others.

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