Grounds Real Estate Development AG (FRA:AMM) ROC % : -6.66% (As of Jun. 2024)

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What is Grounds Real Estate Development AG 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 %. Grounds Real Estate Development AG's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -6.66%.

As of today (2025-04-06), Grounds Real Estate Development AG's WACC % is 10.58%. Grounds Real Estate Development AG's ROC % is -7.16% (calculated using TTM income statement data). Grounds Real Estate Development AG earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Grounds Real Estate Development AG ROC % Historical Data

The historical data trend for Grounds Real Estate Development AG'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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Grounds Real Estate Development AG ROC % Chart

Grounds Real Estate Development AG Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-5.80

3.48

4.41

0.41

-3.35

Grounds Real Estate Development AG Semi-Annual Data
	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial														4.41	-3.49	0.36	-7.29	-6.66

Grounds Real Estate Development AG ROC % Calculation

Grounds Real Estate Development AG'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 )
=	-5.472 * ( 1 - 16.62% )	/	( (129.953	+	142.147)	/ 2 )
=	-4.5625536	/	136.05
=	-3.35 %

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	))
=	138.279	-	6.053	-	( 2.273	-	max(0, 54.793	-	95.05	+	2.273	))
=	129.953

	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	))
=	147.816	-	7.758	-	( 3.028	-	max(0, 106.463	-	104.374	+	3.028	))
=	142.147

Grounds Real Estate Development AG's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-8.564 * ( 1 - -6.25% )	/	( (142.147	+	131.291)	/ 2 )
=	-9.09925	/	136.719
=	-6.66 %

where

	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	))
=	147.816	-	7.758	-	( 3.028	-	max(0, 106.463	-	104.374	+	3.028	))
=	142.147

	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	))
=	139.486	-	6.903	-	( 1.292	-	max(0, 74.627	-	99.246	+	1.292	))
=	131.291

Note: The Operating Income data used here is two times the semi-annual (Jun. 2024) data.

Grounds Real Estate Development AG (FRA:AMM) 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, Grounds Real Estate Development AG's WACC % is 10.58%. Grounds Real Estate Development AG's ROC % is -7.16% (calculated using TTM income statement data). Grounds Real Estate Development AG 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.

Grounds Real Estate Development AG ROC % Related Terms

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Grounds Real Estate Development AG Business Description

Industry

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AMM:Germany

Address

Charlottenstrasse 79-80, Berlin, BB, DEU, 10117

Website

https://www.thegroundsag.com

Grounds Real Estate Development AG carries out housing projects in German metropolitan regions and urban areas. Its business activities cover three core areas such as the company is planning to establish its property portfolio for long-term rental income, which is referred to as the portfolio management business. They also aim to develop the existing properties and sell them as part-ownership, known as the privatization business. Additionally, they plan to construct new housing and sell it to institutional investors, capital investors, and owner-occupiers. This is referred to as the project development business. The group's primary sources of income are the construction work on project developments, privatization income and rental income from existing properties.