Ho Wah Genting Bhd (XKLS:9601) ROC % : -1.62% (As of Sep. 2024)

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What is Ho Wah Genting 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 %. Ho Wah Genting Bhd's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -1.62%.

As of today (2024-12-11), Ho Wah Genting Bhd's WACC % is 4.30%. Ho Wah Genting Bhd's ROC % is -7.73% (calculated using TTM income statement data). Ho Wah Genting Bhd earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Ho Wah Genting Bhd ROC % Historical Data

The historical data trend for Ho Wah Genting 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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Ho Wah Genting Bhd ROC % Chart

Ho Wah Genting Bhd Annual Data

Trend

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Apr22

Dec23

ROC %

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-29.97

2.01

-9.84

-3.30

1.67

Ho Wah Genting Bhd Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Mar21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															13.41	-10.59	-1.31	5.63	-1.62

Ho Wah Genting Bhd ROC % Calculation

Ho Wah Genting Bhd'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: Apr. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	5.302 * ( 1 - 69.03% )	/	( (101.533	+	94.591)	/ 2 )
=	1.6420294	/	98.062
=	1.67 %

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	))
=	178.95	-	63.956	-	( 13.461	-	max(0, 92.575	-	136.784	+	13.461	))
=	101.533

	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	))
=	131.557	-	25.298	-	( 11.668	-	max(0, 30.637	-	90.365	+	11.668	))
=	94.591

Ho Wah Genting 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 )
=	2.296 * ( 1 - 164.04% )	/	( (106.621	+	75.004)	/ 2 )
=	-1.4703584	/	90.8125
=	-1.62 %

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	))
=	168.257	-	44.064	-	( 17.572	-	max(0, 64.061	-	127.883	+	17.572	))
=	106.621

	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	))
=	127.793	-	32.971	-	( 19.818	-	max(0, 34.44	-	89.893	+	19.818	))
=	75.004

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

Ho Wah Genting Bhd (XKLS:9601) 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, Ho Wah Genting Bhd's WACC % is 4.30%. Ho Wah Genting Bhd's ROC % is -7.73% (calculated using TTM income statement data). Ho Wah Genting 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.

Ho Wah Genting Bhd ROC % Related Terms

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Ho Wah Genting Bhd Business Description

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Address

No. 35, Jalan Maharajalela, 1st Floor, Wisma Ho Wah Genting, Kuala Lumpur, SGR, MYS, 50150

Website

https://www.hwgenting.com

Ho Wah Genting Bhd is engaged in investment holdings and the provision of management services to its subsidiaries. The group has four operating segments, namely, Investment, Moulded power supply cord sets, Healthcare and Travelling Services. Moulded power supply cord sets is engaged in manufacturing and trading of wires and cables, moulded power supply cord sets and cable assemblies for electrical and electronic devices and equipment. The group earns a majority of the revenue from Moulded power supply cord sets. Geographically, the group has a presence in North America, Malaysia and the Rest of Asia; with a majority of the revenue being generated from North America.

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