Fast Retailing Co (TSE:9983) ROC % : 18.78% (As of Aug. 2024)

View and export this data going back to 1997. Start your Free Trial

What is Fast Retailing 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 %. Fast Retailing Co's annualized return on capital (ROC %) for the quarter that ended in Aug. 2024 was 18.78%.

As of today (2024-12-12), Fast Retailing Co's WACC % is 5.97%. Fast Retailing Co's ROC % is 22.66% (calculated using TTM income statement data). Fast Retailing Co 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.

Fast Retailing Co ROC % Historical Data

The historical data trend for Fast Retailing 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.

Fast Retailing Co ROC % Chart

Fast Retailing Co Annual Data

Trend

Aug15

Aug16

Aug17

Aug18

Aug19

Aug20

Aug21

Aug22

Aug23

Aug24

ROC %

Get a 7-Day Free Trial

9.62

14.41

15.93

18.82

22.95

Fast Retailing Co Quarterly Data
	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24	May24	Aug24
ROC %	Get a 7-Day Free Trial															10.56	28.18	19.92	24.50	18.78

Fast Retailing Co ROC % Calculation

Fast Retailing Co's annualized Return on Capital (ROC %) for the fiscal year that ended in Aug. 2024 is calculated as:

	ROC % (A: Aug. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Aug. 2023 )	+	Invested Capital (A: Aug. 2024 ))	/ count )
=	499486 * ( 1 - 29.36% )	/	( (1451930	+	1622503)	/ 2 )
=	352836.9104	/	1537216.5
=	22.95 %

where

	Invested Capital		(A: Aug. 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	))
=	3303694	-	404329	-	( 1479474	-	max(0, 729260	-	2176695	+	1479474	))
=	1451930

	Invested Capital		(A: Aug. 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	))
=	3587565	-	454181	-	( 1664114	-	max(0, 852390	-	2363271	+	1664114	))
=	1622503

Fast Retailing Co's annualized Return on Capital (ROC %) for the quarter that ended in Aug. 2024 is calculated as:

	ROC % (Q: Aug. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: May. 2024 )	+	Invested Capital (Q: Aug. 2024 ))	/ count )
=	396244 * ( 1 - 22.37% )	/	( (1653280	+	1622503)	/ 2 )
=	307604.2172	/	1637891.5
=	18.78 %

where

	Invested Capital		(Q: May. 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	))
=	3684122	-	401713	-	( 1648299	-	max(0, 743790	-	2372919	+	1648299	))
=	1653280

	Invested Capital		(Q: Aug. 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	))
=	3587565	-	454181	-	( 1664114	-	max(0, 852390	-	2363271	+	1664114	))
=	1622503

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

Fast Retailing Co (TSE:9983) 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, Fast Retailing Co's WACC % is 5.97%. Fast Retailing Co's ROC % is 22.66% (calculated using TTM income statement data). Fast Retailing Co 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.

Fast Retailing Co ROC % Related Terms

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

Fast Retailing Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Fast Retailing Co Ltd (TSE:9983) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

FRCOY:USA FRCOF:USA 06288:Hong Kong FR7H:Germany

Address

10717-1 Sayama, Yamaguchi, Yamaguchi, JPN, 754-0894

Website

https://www.fastretailing.com

Fast Retailing is Japan's largest apparel company, operating the casualwear retail chain Uniqlo known for its high-quality functional apparel at reasonable prices. Fast Retailing is in charge of product design and sales, while outsourcing almost all of its production to factories in places including China, Vietnam, Bangladesh, Indonesia, and India. It is ranked the fourth-largest apparel company by sales globally in 2023 in our estimate, thanks to the expansion of Uniqlo International, which contributed 52% of core operating profit. As at the end of fiscal 2023, it ran 3,578 stores globally. Other brands in its portfolio include GU and acquired brands including Theory, Comptoir des Cotonniers, and Princesse Tam Tam. The Yanai family owned a 40.86% stake in the firm as at June 8, 2024.

Fast Retailing Co Headlines

No Headlines