Next Entertainment World Co (XKRX:160550) ROC % : -6.79% (As of Sep. 2024)

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What is Next Entertainment World Co 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 %. Next Entertainment World Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -6.79%.

As of today (2025-03-27), Next Entertainment World Co's WACC % is 6.46%. Next Entertainment World Co's ROC % is -5.35% (calculated using TTM income statement data). Next Entertainment World Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Next Entertainment World Co ROC % Historical Data

The historical data trend for Next Entertainment World Co'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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Next Entertainment World Co ROC % Chart

Next Entertainment World Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-3.30

1.03

0.68

12.85

-2.23

Next Entertainment World Co Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															2.14	-0.91	-2.92	-9.64	-6.79

Next Entertainment World Co ROC % Calculation

Next Entertainment World Co'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: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-5281.886 * ( 1 - -1.98% )	/	( (248618.319	+	234454.876)	/ 2 )
=	-5386.4673428	/	241536.5975
=	-2.23 %

where

	Invested Capital		(A: Dec. 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	))
=	332918.824	-	28162.225	-	( 57967.86	-	max(0, 134645.314	-	190783.594	+	57967.86	))
=	248618.319

	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	))
=	313440.239	-	18531.429	-	( 83827.081	-	max(0, 126143.766	-	186597.7	+	83827.081	))
=	234454.876

Next Entertainment World Co'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 )
=	-17255.724 * ( 1 - -0.6% )	/	( (269653.024	+	241449.737)	/ 2 )
=	-17359.258344	/	255551.3805
=	-6.79 %

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	))
=	309883.577	-	17743.999	-	( 81121.807	-	max(0, 160237.934	-	182724.488	+	81121.807	))
=	269653.024

	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	))
=	277078.677	-	15443.878	-	( 72276.595	-	max(0, 131938.31	-	152123.372	+	72276.595	))
=	241449.737

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

Next Entertainment World Co (XKRX:160550) 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, Next Entertainment World Co's WACC % is 6.46%. Next Entertainment World Co's ROC % is -5.35% (calculated using TTM income statement data). Next Entertainment World Co 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.

Next Entertainment World Co ROC % Related Terms

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Next Entertainment World Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » Next Entertainment World Co Ltd (XKRX:160550) » Definitions » ROC %

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Address

8th Floor, Doosan B/D, Eonjuro 726, Gangnam-Gu, Seoul, KOR

Website

http://www.its-new.co.kr

Next Entertainment World Co Ltd is involved in film investment and domestic distribution business. Its business areas include Film, Performance, Ancillary rights distribution, and Music. The firm's key works of film and performance include miracle in cell number 7, the attorney, cold eyes and musical "December and play big talk daddy. It is also involved in the distribution of films and performance in the secondary market through the subsidiary as well as producing, investing and distributing the music of established and new artists and all kinds of music.

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