Dollar General (WBO:DGEN) ROC % : 3.86% (As of Oct. 2024)

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What is Dollar General 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 %. Dollar General's annualized return on capital (ROC %) for the quarter that ended in Oct. 2024 was 3.86%.

As of today (2024-12-14), Dollar General's WACC % is 3.67%. Dollar General's ROC % is 6.03% (calculated using TTM income statement data). Dollar General 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.

Dollar General ROC % Historical Data

The historical data trend for Dollar General'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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Dollar General ROC % Chart

Dollar General Annual Data

Trend

Jan15

Jan16

Jan17

Jan18

Jan19

Jan20

Jan21

Jan22

Jan23

Jan24

ROC %

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12.09

13.16

12.26

11.28

7.45

Dollar General Quarterly Data
	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24	Apr24	Jul24	Oct24
ROC %	Get a 7-Day Free Trial															5.48	7.03	6.47	6.60	3.86

Dollar General ROC % Calculation

Dollar General's annualized Return on Capital (ROC %) for the fiscal year that ended in Jan. 2024 is calculated as:

	ROC % (A: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jan. 2023 )	+	Invested Capital (A: Jan. 2024 ))	/ count )
=	2245.703 * ( 1 - 21.62% )	/	( (23054.803	+	24221.053)	/ 2 )
=	1760.1820114	/	23637.928
=	7.45 %

where

	Invested Capital		(A: Jan. 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	))
=	26989.365	-	3580.459	-	( 354.103	-	max(0, 5463.849	-	7035.176	+	354.103	))
=	23054.803

	Invested Capital		(A: Jan. 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	))
=	28270.353	-	3556.074	-	( 493.226	-	max(0, 6174.194	-	7353.845	+	493.226	))
=	24221.053

Dollar General's annualized Return on Capital (ROC %) for the quarter that ended in Oct. 2024 is calculated as:

	ROC % (Q: Oct. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jul. 2024 )	+	Invested Capital (Q: Oct. 2024 ))	/ count )
=	1189 * ( 1 - 23.22% )	/	( (23644.469	+	23663.179)	/ 2 )
=	912.9142	/	23653.824
=	3.86 %

where

	Invested Capital		(Q: Jul. 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	))
=	29332.291	-	4560.501	-	( 1127.321	-	max(0, 6584.174	-	8043.751	+	1127.321	))
=	23644.469

	Invested Capital		(Q: Oct. 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	))
=	28880.661	-	4724.28	-	( 493.202	-	max(0, 6527.62	-	7506.042	+	493.202	))
=	23663.179

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

Dollar General (WBO:DGEN) 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, Dollar General's WACC % is 3.67%. Dollar General's ROC % is 6.03% (calculated using TTM income statement data). Dollar General 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.

Dollar General ROC % Related Terms

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Dollar General Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Retail - Defensive » Dollar General Corp (WBO:DGEN) » Definitions » ROC %

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Address

100 Mission Ridge, Goodlettsville, TN, USA, 37072

Website

https://www.dollargeneral.com

With more than 20,000 locations, Dollar General's banner is nearly ubiquitous across the rural United States. Dollar General serves as a convenient shopping destination for fill-in store trips, with its value proposition most relevant to consumers in small communities with a dearth of shopping options. The retailer operates a frugal store of about 7,500 square feet and primarily offers an assortment of branded and private-label consumable items (80% of net sales) such as paper and cleaning products, packaged and perishable food, tobacco, and health and beauty items at low prices. Dollar General also offers a limited assortment of seasonal merchandise, home products, and apparel. The firm sells most items at a price point of $10 or less.

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