Reservoir Link Energy Bhd (XKLS:0219) ROC % : -0.61% (As of Sep. 2024)

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What is Reservoir Link Energy Bhd 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 %. Reservoir Link Energy Bhd's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -0.61%.

As of today (2024-12-12), Reservoir Link Energy Bhd's WACC % is 2.97%. Reservoir Link Energy Bhd's ROC % is -0.34% (calculated using TTM income statement data). Reservoir Link Energy Bhd earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Reservoir Link Energy Bhd ROC % Historical Data

The historical data trend for Reservoir Link Energy Bhd'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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Reservoir Link Energy Bhd ROC % Chart

Reservoir Link Energy Bhd Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Jun23

Jun24

ROC %

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22.30

17.64

18.17

10.16

0.65

Reservoir Link Energy Bhd Quarterly Data
	Dec18	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															9.67	3.65	-4.44	-21.14	-0.61

Reservoir Link Energy Bhd ROC % Calculation

Reservoir Link Energy Bhd's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2024 is calculated as:

	ROC % (A: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2023 )	+	Invested Capital (A: Jun. 2024 ))	/ count )
=	6.034 * ( 1 - 81.99% )	/	( (0	+	167.621)	/ 1 )
=	1.0867234	/	167.621
=	0.65 %

where

	Invested Capital		(A: 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	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

	Invested Capital		(A: 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	))
=	231.714	-	49.589	-	( 14.504	-	max(0, 99.087	-	131.153	+	14.504	))
=	167.621

Reservoir Link Energy Bhd'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 )
=	-1.336 * ( 1 - 26.29% )	/	( (167.621	+	155.172)	/ 2 )
=	-0.9847656	/	161.3965
=	-0.61 %

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	))
=	231.714	-	49.589	-	( 14.504	-	max(0, 99.087	-	131.153	+	14.504	))
=	167.621

	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	))
=	229.193	-	52.986	-	( 21.035	-	max(0, 97.463	-	132.17	+	21.035	))
=	155.172

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

Reservoir Link Energy Bhd (XKLS:0219) 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, Reservoir Link Energy Bhd's WACC % is 2.97%. Reservoir Link Energy Bhd's ROC % is -0.34% (calculated using TTM income statement data). Reservoir Link Energy Bhd 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.

Reservoir Link Energy Bhd ROC % Related Terms

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Reservoir Link Energy Bhd Business Description

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GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Reservoir Link Energy Bhd (XKLS:0219) » Definitions » ROC %

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Address

No. 2, Jalan Kerinchi, Gerbang Kerinchi, E-33-01, Menara SUEZCAP 2, KL Gateway, Lestari, Kuala Lumpur, MYS, 59200

Website

https://www.reservoirlink.com

Reservoir Link Energy Bhd is a provider of well services for Oil & Gas Operators and Renewable Energy industry that supports upstream segments. The company provides services for well leak repair, perforation, testing, wash and cement, wireline services, production enhancement, and other services comprise of supplying oilfield products, equipment and technical personnel, and providing construction and consultancy services. The company has three business segments as oil and gas segment; Renewable energy segment and other services. It derives majority of its revenue from Renewable energy Segment.

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