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Changzhou Langbo Sealing Technologies Co (SHSE:603655) ROIC % : 7.70% (As of Sep. 2024)


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What is Changzhou Langbo Sealing Technologies Co 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 %. Changzhou Langbo Sealing Technologies Co's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 7.70%.

As of today (2024-12-11), Changzhou Langbo Sealing Technologies Co's WACC % is 11.52%. Changzhou Langbo Sealing Technologies Co's ROIC % is 7.41% (calculated using TTM income statement data). Changzhou Langbo Sealing Technologies Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Changzhou Langbo Sealing Technologies Co ROIC % Historical Data

The historical data trend for Changzhou Langbo Sealing Technologies Co'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.

Changzhou Langbo Sealing Technologies Co ROIC % Chart

Changzhou Langbo Sealing Technologies Co Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 6.25 7.20 7.17 3.41 5.06

Changzhou Langbo Sealing Technologies Co 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 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 5.48 10.20 4.59 7.21 7.70

Competitive Comparison of Changzhou Langbo Sealing Technologies Co's ROIC %

For the Auto Parts subindustry, Changzhou Langbo Sealing Technologies Co'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.


Changzhou Langbo Sealing Technologies Co's ROIC % Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Changzhou Langbo Sealing Technologies Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Changzhou Langbo Sealing Technologies Co's ROIC % falls into.



Changzhou Langbo Sealing Technologies Co ROIC % Calculation

Changzhou Langbo Sealing Technologies Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

ROIC % (A: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2022 ) + Invested Capital (A: Dec. 2023 ))/ count )
=17.953 * ( 1 - 12.75% )/( (300.868 + 318.029)/ 2 )
=15.6639925/309.4485
=5.06 %

where

Invested Capital(A: Dec. 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))
=564.317 - 22.364 - ( 241.085 - max(0, 31.685 - 417.24+241.085))
=300.868

Invested Capital(A: Dec. 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))
=584.134 - 29.863 - ( 236.242 - max(0, 37.89 - 448.165+236.242))
=318.029

Changzhou Langbo Sealing Technologies Co'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 )
=29.532 * ( 1 - 12.96% )/( (325.274 + 342.348)/ 2 )
=25.7046528/333.811
=7.70 %

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))
=573.048 - 23.861 - ( 223.913 - max(0, 29.499 - 436.073+223.913))
=325.274

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))
=573.78 - 22.897 - ( 208.535 - max(0, 30.346 - 431.689+208.535))
=342.348

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


Changzhou Langbo Sealing Technologies Co  (SHSE:603655) 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, Changzhou Langbo Sealing Technologies Co's WACC % is 11.52%. Changzhou Langbo Sealing Technologies Co's ROIC % is 7.41% (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.


Changzhou Langbo Sealing Technologies Co ROIC % Related Terms

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Changzhou Langbo Sealing Technologies Co Business Description

Traded in Other Exchanges
N/A
Address
No. 1, Jinbo Road, Yaotang Street, Jintan District, Jiangsu Province, Changzhou, CHN, 213200
Changzhou Langbo Sealing Technologies Co Ltd produces rubber sealing parts and rubber products. The company's products are used in various industries including automotive, rail transit, machine-made and other fields including aviation.
Executives
Shi Jian Guo Supervisors
Wu Xing Cai Directors, senior managers
Pan Jian Hua senior management
Li Jin Dong Director

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