Knm Group Bhd (XKLS:7164) ROC % : 25.25% (As of Sep. 2023)

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What is Knm Group 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 %. Knm Group Bhd's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was 25.25%.

As of today (2024-06-05), Knm Group Bhd's WACC % is 8.08%. Knm Group Bhd's ROC % is 0.77% (calculated using TTM income statement data). Knm Group Bhd earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Knm Group Bhd ROC % Historical Data

The historical data trend for Knm Group 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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Knm Group Bhd ROC % Chart

Knm Group Bhd Annual Data

Trend

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

ROC %

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-7.63

0.30

-17.86

2.44

0.29

Knm Group Bhd Quarterly Data
	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Mar22	Sep22	Dec22	Mar23	Sep23
ROC %	Get a 7-Day Free Trial															-4.57	-9.08	-2.86	3.71	25.25

Knm Group Bhd ROC % Calculation

Knm Group Bhd's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2020 is calculated as:

	ROC % (A: Dec. 2020 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2019 )	+	Invested Capital (A: Dec. 2020 ))	/ count )
=	14.041 * ( 1 - 25.37% )	/	( (3504.4	+	3758.345)	/ 2 )
=	10.4787983	/	3631.3725
=	0.29 %

where

	Invested Capital		(A: Dec. 2019 )
=	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	))
=	3898.279	-	313.588	-	( 296.129	-	max(0, 976.562	-	1056.853	+	296.129	))
=	3504.4

	Invested Capital		(A: Dec. 2020 )
=	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	))
=	3858.038	-	311.472	-	( 238.759	-	max(0, 1184.224	-	972.445	+	238.759	))
=	3758.345

Knm Group Bhd's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	67.588 * ( 1 - -1082.17% )	/	( (2689.598	+	3638.338)	/ 2 )
=	799.0050596	/	3163.968
=	25.25 %

where

	Invested Capital		(Q: Mar. 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	))
=	3027.967	-	617.765	-	( 44.169	-	max(0, 2105.181	-	1825.785	+	44.169	))
=	2689.598

	Invested Capital		(Q: Sep. 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	))
=	3240.875	-	434.53	-	( 197.959	-	max(0, 2127.702	-	1295.709	+	197.959	))
=	3638.338

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) data.

Knm Group Bhd (XKLS:7164) 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, Knm Group Bhd's WACC % is 8.08%. Knm Group Bhd's ROC % is 0.77% (calculated using TTM income statement data). Knm Group 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.

Knm Group Bhd ROC % Related Terms

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Knm Group Bhd (XKLS:7164) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Knm Group Bhd (XKLS:7164) » Definitions » ROC %

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Address

15 Jalan Dagang SB4/1, Taman Sungai Besi Indah, Seri Kembangan, MYS, 43300

Website

http://www.knm-group.com

Knm Group Bhd is a Malaysia-based company offering project management, engineering, manufacturing, and construction services for renewable energy, power, utilities, refining, and petrochemical industries. The company manufactures customized process equipment and modular systems under the brands of KNM, BORSIG, and FBM Hudson. Its geographical segments include Asia and Oceania; Europe and America. The company derives a majority of its revenue from Asia and Oceania segments. Asia and Oceania segments include Malaysia, Thailand, China, Indonesia, Myanmar, Australia, and Mauritius.

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