United Malacca Bhd (XKLS:2593) ROC % : 4.64% (As of Jan. 2024)

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What is United Malacca 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 %. United Malacca Bhd's annualized return on capital (ROC %) for the quarter that ended in Jan. 2024 was 4.64%.

As of today (2024-05-21), United Malacca Bhd's WACC % is 6.93%. United Malacca Bhd's ROC % is 2.30% (calculated using TTM income statement data). United Malacca Bhd earns returns that do not match up to its cost of capital. It will destroy value as it grows.

United Malacca Bhd ROC % Historical Data

The historical data trend for United Malacca 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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United Malacca Bhd ROC % Chart

United Malacca Bhd Annual Data

Trend

Apr14

Apr15

Apr16

Apr17

Apr18

Apr19

Apr20

Apr21

Apr22

Apr23

ROC %

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-1.91

-2.76

0.88

6.88

3.34

United Malacca Bhd Quarterly Data
	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
ROC %	Get a 7-Day Free Trial															3.74	0.17	0.85	3.62	4.64

United Malacca Bhd ROC % Calculation

United Malacca Bhd's annualized Return on Capital (ROC %) for the fiscal year that ended in Apr. 2023 is calculated as:

	ROC % (A: Apr. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Apr. 2022 )	+	Invested Capital (A: Apr. 2023 ))	/ count )
=	84.382 * ( 1 - 32.47% )	/	( (1680.644	+	1728.55)	/ 2 )
=	56.9831646	/	1704.597
=	3.34 %

where

	Invested Capital		(A: Apr. 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	))
=	1835.702	-	28.46	-	( 133.264	-	max(0, 147.508	-	274.106	+	133.264	))
=	1680.644

	Invested Capital		(A: Apr. 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	))
=	1841.943	-	17.908	-	( 123.803	-	max(0, 176.451	-	271.936	+	123.803	))
=	1728.55

United Malacca Bhd's annualized Return on Capital (ROC %) for the quarter that ended in Jan. 2024 is calculated as:

	ROC % (Q: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Oct. 2023 )	+	Invested Capital (Q: Jan. 2024 ))	/ count )
=	109.38 * ( 1 - 28.37% )	/	( (1690.699	+	1684.491)	/ 2 )
=	78.348894	/	1687.595
=	4.64 %

where

	Invested Capital		(Q: Oct. 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	))
=	1830.951	-	59.124	-	( 81.128	-	max(0, 168.814	-	273.238	+	81.128	))
=	1690.699

	Invested Capital		(Q: 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	))
=	1839.287	-	61.629	-	( 93.167	-	max(0, 168.312	-	283.574	+	93.167	))
=	1684.491

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

United Malacca Bhd (XKLS:2593) 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, United Malacca Bhd's WACC % is 6.93%. United Malacca Bhd's ROC % is 2.30% (calculated using TTM income statement data). United Malacca 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.

United Malacca Bhd ROC % Related Terms

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United Malacca Bhd (XKLS:2593) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » United Malacca Bhd (XKLS:2593) » Definitions » ROC %

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Address

6th Floor, No. 61, Jalan Melaka Raya 8, Taman Melaka Raya, Melaka, MLA, MYS, 75000

Website

https://www.unitedmalacca.com.my

United Malacca Bhd is a Malaysia based oil palm cultivation company. The company's operating segment includes Plantation which includes cultivation of oil palm and palm oil milling and Investment holding. It generates maximum revenue from the Plantation segment. Geographically, it derives a majority of revenue from Malaysia and also has a presence in Indonesia.

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