Mughal Iron & Steel Industries (KAR:MUGHAL) ROIC % : 1.04% (As of Sep. 2024)

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What is Mughal Iron & Steel Industries 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 %. Mughal Iron & Steel Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 1.04%.

As of today (2025-03-04), Mughal Iron & Steel Industries's WACC % is 4.48%. Mughal Iron & Steel Industries's ROIC % is -12.41% (calculated using TTM income statement data). Mughal Iron & Steel Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Mughal Iron & Steel Industries ROIC % Historical Data

The historical data trend for Mughal Iron & Steel Industries'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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Mughal Iron & Steel Industries ROIC % Chart

Mughal Iron & Steel Industries Annual Data

Trend

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

ROIC %

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10.33

14.83

18.28

15.73

-120.27

Mughal Iron & Steel Industries Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROIC %	Get a 7-Day Free Trial															15.93	14.47	-1.64	-3.08	1.04

Competitive Comparison of Mughal Iron & Steel Industries's ROIC %

For the Steel subindustry, Mughal Iron & Steel Industries'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.

Mughal Iron & Steel Industries's ROIC % Distribution in the Steel Industry

For the Steel industry and Basic Materials sector, Mughal Iron & Steel Industries's ROIC % distribution charts can be found below:

* The bar in red indicates where Mughal Iron & Steel Industries's ROIC % falls into.

Mughal Iron & Steel Industries ROIC % Calculation

Mughal Iron & Steel Industries's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2024 is calculated as:

	ROIC % (A: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2023 )	+	Invested Capital (A: Jun. 2024 ))	/ count )
=	6599.404 * ( 1 - 1146.77% )	/	( (53445.483	+	61432.677)	/ 2 )
=	-69080.5812508	/	57439.08
=	-120.27 %

where

	Invested Capital		(A: 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	))
=	59831.987	-	3624.771	-	( 2761.733	-	max(0, 26592.117	-	40021.097	+	2761.733	))
=	53445.483

	Invested Capital		(A: Jun. 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	))
=	70184.197	-	5385.64	-	( 3365.88	-	max(0, 38123.844	-	46104.353	+	3365.88	))
=	61432.677

Mughal Iron & Steel Industries'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: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	6920.996 * ( 1 - 90.58% )	/	( (61432.677	+	63964.334)	/ 2 )
=	651.9578232	/	62698.5055
=	1.04 %

where

	Invested Capital		(Q: Jun. 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	))
=	70184.197	-	5385.64	-	( 3365.88	-	max(0, 38123.844	-	46104.353	+	3365.88	))
=	61432.677

	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	))
=	71245.444	-	4477.477	-	( 2803.633	-	max(0, 39705.223	-	46996.777	+	2803.633	))
=	63964.334

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

Mughal Iron & Steel Industries (KAR:MUGHAL) 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, Mughal Iron & Steel Industries's WACC % is 4.48%. Mughal Iron & Steel Industries's ROIC % is -12.41% (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.

Mughal Iron & Steel Industries ROIC % Related Terms

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Mughal Iron & Steel Industries Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Steel » Mughal Iron & Steel Industries Ltd (KAR:MUGHAL) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

31-A Shadman 1, Lahore, PB, PAK

Website

https://www.mughalsteel.com

Mughal Iron & Steel Industries Ltd is engaged in the manufacturing and trading of mild steel products. The operating segments of the company are Ferrous and Non-Ferrous. The company's main products involve Steel re-bars (G60 / Mughal Supreme), Girders, Billets, Copper ingots and Copper granules.

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