MingZhu Logistics Holdings (MingZhu Logistics Holdings) ROC % : -2.98% (As of Jun. 2023)

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What is MingZhu Logistics Holdings 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 %. MingZhu Logistics Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2023 was -2.98%.

As of today (2024-05-17), MingZhu Logistics Holdings's WACC % is 11.75%. MingZhu Logistics Holdings's ROC % is 0.11% (calculated using TTM income statement data). MingZhu Logistics Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

MingZhu Logistics Holdings ROC % Historical Data

The historical data trend for MingZhu Logistics Holdings'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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MingZhu Logistics Holdings ROC % Chart

MingZhu Logistics Holdings Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

ROC %

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25.96

13.18

4.67

-1.56

4.34

MingZhu Logistics Holdings Semi-Annual Data
	Dec17	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23
ROC %	Get a 7-Day Free Trial						2.82	-5.04	4.97	2.60	-2.98

MingZhu Logistics Holdings ROC % Calculation

MingZhu Logistics Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	2.876 * ( 1 - 21.85% )	/	( (47.006	+	56.573)	/ 2 )
=	2.247594	/	51.7895
=	4.34 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	76.355	-	24.041	-	( 5.752	-	max(0, 34.301	-	39.609	+	5.752	))
=	47.006

	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	))
=	111.457	-	50.577	-	( 5.687	-	max(0, 61.943	-	66.25	+	5.687	))
=	56.573

MingZhu Logistics Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2023 is calculated as:

	ROC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2022 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	-1.804 * ( 1 - 4.73% )	/	( (56.573	+	58.641)	/ 2 )
=	-1.7186708	/	57.607
=	-2.98 %

where

	Invested Capital		(Q: 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	))
=	111.457	-	50.577	-	( 5.687	-	max(0, 61.943	-	66.25	+	5.687	))
=	56.573

	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	))
=	114.303	-	52.212	-	( 4.307	-	max(0, 66.976	-	70.426	+	4.307	))
=	58.641

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

MingZhu Logistics Holdings (NAS:YGMZ) 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, MingZhu Logistics Holdings's WACC % is 11.75%. MingZhu Logistics Holdings's ROC % is 0.11% (calculated using TTM income statement data). MingZhu Logistics Holdings 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.

MingZhu Logistics Holdings ROC % Related Terms

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MingZhu Logistics Holdings (MingZhu Logistics Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » MingZhu Logistics Holdings Ltd (NAS:YGMZ) » Definitions » ROC %

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Address

No. 3018 Shayan Road, 27F, Yantian Modern Industry Service Center, Yantian District, Guangdong, Shenzhen, CHN, 518081

Website

http://www.szygmz.com

MingZhu Logistics Holdings Ltd provides transportation and logistics services. The firm offers 3A-grade trucking services in China. It operates a self-owned truckload fleet with more than 130 tractors and 90 trailers. The firm's transportation services are operated out of two terminals: Guangdong region, and Xinjiang region. The company's customers include sizeable logistics companies, freight forwarders, and warehouse operators. The firm derives its key revenue from the trucking service business.