Reef Casino Trust (ASX:RCT) ROIC % : 12.78% (As of Dec. 2023)

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What is Reef Casino Trust ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Reef Casino Trust's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 12.78%.

As of today (2024-04-29), Reef Casino Trust's WACC % is 6.96%. Reef Casino Trust's ROIC % is 11.38% (calculated using TTM income statement data). Reef Casino Trust generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Reef Casino Trust ROIC % Historical Data

The historical data trend for Reef Casino Trust's ROIC % 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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Reef Casino Trust ROIC % Chart

Reef Casino Trust Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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6.88

5.19

15.79

19.50

11.39

Reef Casino Trust Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROIC %	Get a 7-Day Free Trial															18.59	14.26	24.91	9.94	12.78

Competitive Comparison of Reef Casino Trust's ROIC %

For the Resorts & Casinos subindustry, Reef Casino Trust's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Reef Casino Trust's ROIC % Distribution in the Travel & Leisure Industry

For the Travel & Leisure industry and Consumer Cyclical sector, Reef Casino Trust's ROIC % distribution charts can be found below:

* The bar in red indicates where Reef Casino Trust's ROIC % falls into.

Reef Casino Trust ROIC % Calculation

Reef Casino Trust's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	10.469 * ( 1 - 0% )	/	( (91.011	+	92.852)	/ 2 )
=	10.469	/	91.9315
=	11.39 %

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	))
=	107.355	-	7.661	-	( 13.745	-	max(0, 7.759	-	16.442	+	13.745	))
=	91.011

	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	))
=	102.552	-	5.878	-	( 7.345	-	max(0, 5.982	-	9.804	+	7.345	))
=	92.852

Reef Casino Trust's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	11.828 * ( 1 - 0% )	/	( (92.202	+	92.852)	/ 2 )
=	11.828	/	92.527
=	12.78 %

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	))
=	100.045	-	3.793	-	( 4.524	-	max(0, 3.894	-	7.944	+	4.524	))
=	92.202

	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	))
=	102.552	-	5.878	-	( 7.345	-	max(0, 5.982	-	9.804	+	7.345	))
=	92.852

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

Reef Casino Trust (ASX:RCT) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Reef Casino Trust's WACC % is 6.96%. Reef Casino Trust's ROIC % is 11.38% (calculated using TTM income statement data). Reef Casino Trust generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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. Reef Casino Trust 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 %, ROIC % 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.

Reef Casino Trust ROIC % Related Terms

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Reef Casino Trust (ASX:RCT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » Reef Casino Trust (ASX:RCT) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Level 3, 249 Turbot Street, Sofitel Hotel, Brisbane, QLD, AUS, 4000

Website

https://www.reefcasino.com.au

Reef Casino Trust is engaged in the operation of the reef hotel-casino complex located in Cairns, Queensland, Australia. The company derives revenue from the casino which includes electronic gaming and table games, and hotel which includes room accommodation and food and beverage. The majority of the revenue is generated from the rental income received from the casino operations.

Reef Casino Trust (ASX:RCT) Headlines

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