Link Real Estate Investment Trust (HKSE:00823) ROIC % : 4.42% (As of Sep. 2023)

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What is Link Real Estate Investment 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 %. Link Real Estate Investment Trust's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was 4.42%.

As of today (2024-05-01), Link Real Estate Investment Trust's WACC % is 6.75%. Link Real Estate Investment Trust's ROIC % is 5.72% (calculated using TTM income statement data). Link Real Estate Investment Trust earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Link Real Estate Investment Trust ROIC % Historical Data

The historical data trend for Link Real Estate Investment 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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Link Real Estate Investment Trust ROIC % Chart

Link Real Estate Investment Trust Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROIC %

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3.13

3.82

1.55

3.20

3.31

Link Real Estate Investment Trust 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															3.50	1.94	3.40	2.72	4.42

Competitive Comparison of Link Real Estate Investment Trust's ROIC %

For the REIT - Retail subindustry, Link Real Estate Investment 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.

Link Real Estate Investment Trust's ROIC % Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Link Real Estate Investment Trust's ROIC % distribution charts can be found below:

* The bar in red indicates where Link Real Estate Investment Trust's ROIC % falls into.

Link Real Estate Investment Trust ROIC % Calculation

Link Real Estate Investment Trust'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 )
=	8545 * ( 1 - 6.17% )	/	( (228862	+	254956)	/ 2 )
=	8017.7735	/	241909
=	3.31 %

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	))
=	225716	-	4096	-	( 2949	-	max(0, 12297	-	5055	+	2949	))
=	228862

	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	))
=	267919	-	4450	-	( 17188	-	max(0, 11321	-	19834	+	17188	))
=	254956

Link Real Estate Investment Trust'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 )
=	9360 * ( 1 - -18.51% )	/	( (254956	+	247486)	/ 2 )
=	11092.536	/	251221
=	4.42 %

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	))
=	267919	-	4450	-	( 17188	-	max(0, 11321	-	19834	+	17188	))
=	254956

	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	))
=	253689	-	4419	-	( 12890	-	max(0, 12764	-	14548	+	12890	))
=	247486

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

Link Real Estate Investment Trust (HKSE:00823) 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, Link Real Estate Investment Trust's WACC % is 6.75%. Link Real Estate Investment Trust's ROIC % is 5.72% (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.

Link Real Estate Investment Trust ROIC % Related Terms

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Link Real Estate Investment Trust (HKSE:00823) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Link Real Estate Investment Trust (HKSE:00823) » Definitions » ROIC %

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Traded in Other Exchanges

LKREF:USA L5R:Germany

Address

77 Hoi Bun Road, 20th Floor, Tower 1, The Quayside, Kowloon, Kwun Tong, Hong Kong, HKG

Website

https://www.linkreit.com

Link REIT is Asia's largest REIT, listed in 2005 to privatize retail assets held by the Hong Kong Housing Authority. It owns 154 properties and about 60,000 car park spaces. It expanded its investment mandate in 2014 to allow overseas acquisitions and has since acquired retail and office properties in China, as well as an office development project in Hong Kong. More recently, Link expanded its footprint to Sydney, Melbourne, London, and Singapore.

Link Real Estate Investment Trust (HKSE:00823) Headlines

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