Olimpo Real Estate Portugal SIGI (XLIS:MLORE) ROC % : 2.85% (As of Dec. 2023)

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What is Olimpo Real Estate Portugal SIGI 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 %. Olimpo Real Estate Portugal SIGI's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 2.85%.

As of today (2024-06-14), Olimpo Real Estate Portugal SIGI's WACC % is 4.70%. Olimpo Real Estate Portugal SIGI's ROC % is 2.61% (calculated using TTM income statement data). Olimpo Real Estate Portugal SIGI earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Olimpo Real Estate Portugal SIGI ROC % Historical Data

The historical data trend for Olimpo Real Estate Portugal SIGI'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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Olimpo Real Estate Portugal SIGI ROC % Chart

Olimpo Real Estate Portugal SIGI Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

0.46

2.05

1.75

2.62

Olimpo Real Estate Portugal SIGI Semi-Annual Data
	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial			2.56	2.17	1.75	2.32	2.85

Olimpo Real Estate Portugal SIGI ROC % Calculation

Olimpo Real Estate Portugal SIGI'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 )
=	2.59 * ( 1 - 13.46% )	/	( (86.781	+	84.299)	/ 2 )
=	2.241386	/	85.54
=	2.62 %

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	))
=	90.976	-	0.978	-	( 3.994	-	max(0, 1.06	-	4.277	+	3.994	))
=	86.781

	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	))
=	86.924	-	0.713	-	( 2.543	-	max(0, 0.801	-	2.713	+	2.543	))
=	84.299

Olimpo Real Estate Portugal SIGI's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	2.722 * ( 1 - 10.66% )	/	( (86.091	+	84.299)	/ 2 )
=	2.4318348	/	85.195
=	2.85 %

where

	Invested Capital		(Q: 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	))
=	87.851	-	1.269	-	( 1.571	-	max(0, 1.356	-	1.847	+	1.571	))
=	86.091

	Invested Capital		(Q: 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	))
=	86.924	-	0.713	-	( 2.543	-	max(0, 0.801	-	2.713	+	2.543	))
=	84.299

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Olimpo Real Estate Portugal SIGI (XLIS:MLORE) 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, Olimpo Real Estate Portugal SIGI's WACC % is 4.70%. Olimpo Real Estate Portugal SIGI's ROC % is 2.61% (calculated using TTM income statement data). Olimpo Real Estate Portugal SIGI 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.

Olimpo Real Estate Portugal SIGI ROC % Related Terms

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Olimpo Real Estate Portugal SIGI (XLIS:MLORE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Olimpo Real Estate Portugal SIGI SA (XLIS:MLORE) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Lugar do Espido, Via Norte, Miaia, PRT, 4471-909

Website

https://www.ores-portugal.com

Olimpo Real Estate Portugal SIGI SA is a real estate investment and asset management company. The company's objectives are to acquire offices and commercial real estate assets with long-term growth potential in the Portuguese and Spanish markets.

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