BYD Co (WBO:BY6) ROC % : 11.70% (As of Sep. 2024)

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What is BYD 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 %. BYD Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 11.70%.

As of today (2024-12-15), BYD Co's WACC % is 11.68%. BYD Co's ROC % is 8.54% (calculated using TTM income statement data). BYD Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

BYD Co ROC % Historical Data

The historical data trend for BYD 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.

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BYD Co ROC % Chart

BYD Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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4.19

8.13

4.64

8.04

8.46

BYD Co Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															11.34	9.08	4.33	8.93	11.70

BYD Co ROC % Calculation

BYD Co'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 )
=	4933.269 * ( 1 - 15.9% )	/	( (41183.126	+	56848.009)	/ 2 )
=	4148.879229	/	49015.5675
=	8.46 %

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	))
=	66870.986	-	38218.341	-	( 9762.424	-	max(0, 45136.375	-	32605.894	+	9762.424	))
=	41183.126

	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	))
=	87272.795	-	49887.402	-	( 15238.849	-	max(0, 58263.401	-	38800.785	+	15238.849	))
=	56848.009

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

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	8219.396 * ( 1 - 13.89% )	/	( (57418.352	+	63569.723)	/ 2 )
=	7077.7218956	/	60494.0375
=	11.70 %

where

	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	))
=	87877.009	-	50218.964	-	( 9020.362	-	max(0, 57975.942	-	38215.635	+	9020.362	))
=	57418.352

	Invested Capital		(Q: Sep. 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	))
=	97314.559	-	52843.738	-	( 11680.724	-	max(0, 65205.593	-	46106.691	+	11680.724	))
=	63569.723

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

BYD Co (WBO:BY6) 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, BYD Co's WACC % is 11.68%. BYD Co's ROC % is 8.54% (calculated using TTM income statement data). BYD 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.

BYD Co ROC % Related Terms

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BYD Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » BYD Co Ltd (WBO:BY6) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

BYDDY:USA BYDDF:USA 1211:Mexico 01211:Hong Kong 0HKY:UK 0VSO:UK BY6:Germany 002594:China BY6:Bulgaria

Address

No. 3009, BYD Road, Pingshan, Guangdong Province, Shenzhen, CHN, 518118

Website

https://www.byd.com

Founded in 1995, BYD is a leading Chinese manufacturer in the design, development, and production of new energy vehicles, or NEVs. In March 2022, the firm discontinued production of internal combustion engine, or ICE, vehicles. Its products primarily target the growing midpriced mass-market segment in China's passenger vehicle market. The company sold about 3 million passenger NEVs in 2023, accounting for 33% of the Chinese passenger NEV market. Besides automobile production, the company is also engaged in handset components and assembly services, as well as the rechargeable battery and photovoltaics business. After more than 25 years of development, the company has established over 30 industrial parks worldwide.

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