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Johnson Electric Holdings (HKSE:00179) ROIC % : 9.37% (As of Sep. 2024)


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What is Johnson Electric Holdings 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 %. Johnson Electric Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 9.37%.

As of today (2024-12-14), Johnson Electric Holdings's WACC % is 7.87%. Johnson Electric Holdings's ROIC % is 9.04% (calculated using TTM income statement data). Johnson Electric Holdings 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.


Johnson Electric Holdings ROIC % Historical Data

The historical data trend for Johnson Electric Holdings'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.

* Premium members only.

Johnson Electric Holdings ROIC % Chart

Johnson Electric Holdings Annual Data
Trend Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22 Mar23 Mar24
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 7.39 8.56 4.73 4.96 8.88

Johnson Electric Holdings Semi-Annual Data
Mar15 Sep15 Mar16 Sep16 Mar17 Sep17 Mar18 Sep18 Mar19 Sep19 Mar20 Sep20 Mar21 Sep21 Mar22 Sep22 Mar23 Sep23 Mar24 Sep24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.46 4.91 9.15 8.76 9.37

Competitive Comparison of Johnson Electric Holdings's ROIC %

For the Auto Parts subindustry, Johnson Electric Holdings'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.


Johnson Electric Holdings's ROIC % Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Johnson Electric Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Johnson Electric Holdings's ROIC % falls into.



Johnson Electric Holdings ROIC % Calculation

Johnson Electric Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2024 is calculated as:

ROIC % (A: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Mar. 2023 ) + Invested Capital (A: Mar. 2024 ))/ count )
=2229.172 * ( 1 - 14.31% )/( (22459.628 + 20570.117)/ 2 )
=1910.1774868/21514.8725
=8.88 %

where

Invested Capital(A: Mar. 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))
=32192.149 - 6372.689 - ( 3359.832 - max(0, 7702.801 - 14824.75+3359.832))
=22459.628

Invested Capital(A: Mar. 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))
=33024.544 - 5978.016 - ( 6476.411 - max(0, 8969.625 - 17466.968+6476.411))
=20570.117

Johnson Electric Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2024 is calculated as:

ROIC % (Q: Sep. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2024 ) + Invested Capital (Q: Sep. 2024 ))/ count )
=2278.712 * ( 1 - 15.77% )/( (20570.117 + 20400.515)/ 2 )
=1919.3591176/20485.316
=9.37 %

where

Invested Capital(Q: Mar. 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))
=33024.544 - 5978.016 - ( 6476.411 - max(0, 8969.625 - 17466.968+6476.411))
=20570.117

Invested Capital(Q: Sep. 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))
=31877.983 - 6030.25 - ( 5447.218 - max(0, 6648.356 - 16758.215+5447.218))
=20400.515

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

* 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.


Johnson Electric Holdings  (HKSE:00179) 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, Johnson Electric Holdings's WACC % is 7.87%. Johnson Electric Holdings's ROIC % is 9.04% (calculated using TTM income statement data). Johnson Electric Holdings 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. Johnson Electric 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 %, 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.


Johnson Electric Holdings ROIC % Related Terms

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Johnson Electric Holdings Business Description

Traded in Other Exchanges
Address
12 Science Park East Avenue, 6th Floor, Hong Kong Science Park, Shatin, New Territories, Hong Kong, HKG
Johnson Electric Holdings Ltd, along with its subsidiaries, is engaged in the manufacturing and selling of electro-mechanical motion systems and solutions. The company is organized into two business units: Automotive Products Group and Industry Products Group of which Automotive Products Group contributes the vast majority of its total revenue. Its automotive products include cooling fans, electric power steering motors, headlamp actuators, transmission and driveline actuators. Its industry segment offers medical devices, circuit breakers, power tools, industrial and laboratory equipment, building automation, and optronics. Geographically, the company generates revenue from North America, the People's Republic of China, South America, Asia-Pacific, Europe, the Middle East and Africa.
Executives
Winibest Company Limited 2101 Beneficial owner
Wang Koo Yik Chun 2305 Beneficiary of a trust
Hsbc International Trustee Limited 2301 Trustee
Federal Trust Company Limited 2301 Trustee
Merriland Overseas Limited 2201 Interest of corporation controlled by you
Deltec Bank & Trust Limited 2301 Trustee
Ansbacher (bahamas) Limited 2301 Trustee
Schroders Plc 2102 Investment manager
Great Sound Global Limited 2201 Interest of corporation controlled by you

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