Emperor Entertainment Hotel (HKSE:00296) ROIC % : 0.29% (As of Sep. 2023)

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What is Emperor Entertainment Hotel 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 %. Emperor Entertainment Hotel's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was 0.29%.

As of today (2024-05-01), Emperor Entertainment Hotel's WACC % is 7.45%. Emperor Entertainment Hotel's ROIC % is -3.23% (calculated using TTM income statement data). Emperor Entertainment Hotel earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Emperor Entertainment Hotel ROIC % Historical Data

The historical data trend for Emperor Entertainment Hotel'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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Emperor Entertainment Hotel ROIC % Chart

Emperor Entertainment Hotel Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROIC %

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12.33

7.75

-9.52

-9.27

-4.67

Emperor Entertainment Hotel Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
ROIC %	Get a 7-Day Free Trial															-3.63	-11.11	-9.36	-14.30	0.29

Competitive Comparison of Emperor Entertainment Hotel's ROIC %

For the Resorts & Casinos subindustry, Emperor Entertainment Hotel'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.

Emperor Entertainment Hotel's ROIC % Distribution in the Travel & Leisure Industry

For the Travel & Leisure industry and Consumer Cyclical sector, Emperor Entertainment Hotel's ROIC % distribution charts can be found below:

* The bar in red indicates where Emperor Entertainment Hotel's ROIC % falls into.

Emperor Entertainment Hotel ROIC % Calculation

Emperor Entertainment Hotel's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROIC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	-271.633 * ( 1 - 29.37% )	/	( (3929.976	+	4292.142)	/ 2 )
=	-191.8543879	/	4111.059
=	-4.67 %

where

	Invested Capital		(A: Mar. 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	))
=	5030.423	-	279.709	-	( 985.436	-	max(0, 309.151	-	1129.889	+	985.436	))
=	3929.976

	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	))
=	4837.715	-	232.023	-	( 437.119	-	max(0, 253.213	-	566.763	+	437.119	))
=	4292.142

Emperor Entertainment Hotel's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROIC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	20.206 * ( 1 - 38.49% )	/	( (4292.142	+	4264.087)	/ 2 )
=	12.4287106	/	4278.1145
=	0.29 %

where

	Invested Capital		(Q: 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	))
=	4837.715	-	232.023	-	( 437.119	-	max(0, 253.213	-	566.763	+	437.119	))
=	4292.142

	Invested Capital		(Q: Sep. 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	))
=	4846.845	-	220.233	-	( 521.723	-	max(0, 246.074	-	608.599	+	521.723	))
=	4264.087

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

Emperor Entertainment Hotel (HKSE:00296) 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, Emperor Entertainment Hotel's WACC % is 7.45%. Emperor Entertainment Hotel's ROIC % is -3.23% (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.

Emperor Entertainment Hotel ROIC % Related Terms

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Emperor Entertainment Hotel (HKSE:00296) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » Emperor Entertainment Hotel Ltd (HKSE:00296) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

EM7A:Germany

Address

288 Hennessy Road, 28th Floor, Emperor Group Centre, Wanchai, Hong Kong, HKG

Website

https://www.emp296.com

Emperor Entertainment Hotel Ltd is a Macao-based company that is active in the hospitality and entertainment industry. The company is engaged provision of gaming-related marketing and public relations services in the casino of the Grand Emperor Hotel, the operation of a mass market hall, VIP room, and slot machine hall operations. The company is also engaged in the hotel operation of the Grand Emperor Hotel and the Inn Hotel Macau. The company manages its business in segments namely gaming operations, Leasing, and hotel operation. It generates the majority of its revenue from hotel operations in Macau.

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