Changming Industrial Management Group Holding (Changming Industrial Management Group Holding) ROIC % : -15.75% (As of Jun. 2009)

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What is Changming Industrial Management Group Holding 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 %. Changming Industrial Management Group Holding's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2009 was -15.75%.

As of today (2024-06-23), Changming Industrial Management Group Holding's WACC % is 0.00%. Changming Industrial Management Group Holding's ROIC % is 0.00% (calculated using TTM income statement data). Changming Industrial Management Group Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Changming Industrial Management Group Holding ROIC % Historical Data

The historical data trend for Changming Industrial Management Group Holding'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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Changming Industrial Management Group Holding ROIC % Chart

Changming Industrial Management Group Holding Annual Data

Trend

May07

May08

ROIC %

-133.33

Changming Industrial Management Group Holding Quarterly Data
	Nov06	Feb07	May07	Aug07	Nov07	Feb08	May08	Sep08	Dec08	Mar09	Jun09
ROIC %	Get a 7-Day Free Trial						-213.33	-	-37.28	-114.86	-15.75

Competitive Comparison of Changming Industrial Management Group Holding's ROIC %

For the Other Industrial Metals & Mining subindustry, Changming Industrial Management Group Holding'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.

Changming Industrial Management Group Holding's ROIC % Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Changming Industrial Management Group Holding's ROIC % distribution charts can be found below:

* The bar in red indicates where Changming Industrial Management Group Holding's ROIC % falls into.

Changming Industrial Management Group Holding ROIC % Calculation

Changming Industrial Management Group Holding's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in May. 2008 is calculated as:

	ROIC % (A: May. 2008 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: May. 2007 )	+	Invested Capital (A: May. 2008 ))	/ count )
=	-0.02 * ( 1 - 0% )	/	( (0	+	0.015)	/ 1 )
=	-0.02	/	0.015
=	-133.33 %

where

	Invested Capital		(A: May. 2007 )
=	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	))
=	0.003	-	0.003	-	( 0.003	-	max(0, 0.003	-	0.003	+	0.003	))
=	0

	Invested Capital		(A: May. 2008 )
=	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	))
=	0	-	0.003	-	( 0	-	max(0, 0.018	-	0	+	0	))
=	0.015

Changming Industrial Management Group Holding's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2009 is calculated as:

	ROIC % (Q: Jun. 2009 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2009 )	+	Invested Capital (Q: Jun. 2009 ))	/ count )
=	-0.384 * ( 1 - 0% )	/	( (2.37	+	2.507)	/ 2 )
=	-0.384	/	2.4385
=	-15.75 %

where

	Invested Capital		(Q: Mar. 2009 )
=	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	))
=	1.068	-	4.495	-	( 0.04	-	max(0, 6.002	-	0.205	+	0.04	))
=	2.37

	Invested Capital		(Q: Jun. 2009 )
=	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	))
=	1.478	-	4.538	-	( 0.027	-	max(0, 6.041	-	0.474	+	0.027	))
=	2.507

Note: The Operating Income data used here is four times the quarterly (Jun. 2009) data.

Changming Industrial Management Group Holding (OTCPK:CMIM) 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, Changming Industrial Management Group Holding's WACC % is 0.00%. Changming Industrial Management Group Holding's ROIC % is 0.00% (calculated using TTM income statement data).

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.

Changming Industrial Management Group Holding ROIC % Related Terms

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Changming Industrial Management Group Holding (Changming Industrial Management Group Holding) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Changming Industrial Management Group Holding Inc (OTCPK:CMIM) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Room 904, Tung Wai Commercial Building, Wan Chai, Hong Kong, HKG

Website

http://www.sxcmky.com

Changming Industrial Management Group Holding Inc is engaged in the processing and sales of mineral products as well as vanadium mining. Its product series include Product Series Vanadium ore, crystal, pentoxide, alloy, iron, and titanium alloy.

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