GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Hunan Fangsheng Pharmaceutical Co Ltd (SHSE:603998) » Definitions » ROIC %

Hunan Fangsheng Pharmaceutical Co (SHSE:603998) ROIC % : 9.03% (As of Sep. 2024)


View and export this data going back to 2014. Start your Free Trial

What is Hunan Fangsheng Pharmaceutical 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 %. Hunan Fangsheng Pharmaceutical Co's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 9.03%.

As of today (2025-04-07), Hunan Fangsheng Pharmaceutical Co's WACC % is 7.77%. Hunan Fangsheng Pharmaceutical Co's ROIC % is 9.16% (calculated using TTM income statement data). Hunan Fangsheng Pharmaceutical Co 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.


Hunan Fangsheng Pharmaceutical Co ROIC % Historical Data

The historical data trend for Hunan Fangsheng Pharmaceutical 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.

Hunan Fangsheng Pharmaceutical Co ROIC % Chart

Hunan Fangsheng Pharmaceutical 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 6.06 5.28 5.13 8.10 7.57

Hunan Fangsheng Pharmaceutical 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 6.89 6.20 10.64 10.02 9.03

Competitive Comparison of Hunan Fangsheng Pharmaceutical Co's ROIC %

For the Drug Manufacturers - Specialty & Generic subindustry, Hunan Fangsheng Pharmaceutical 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.


Hunan Fangsheng Pharmaceutical Co's ROIC % Distribution in the Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, Hunan Fangsheng Pharmaceutical Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Hunan Fangsheng Pharmaceutical Co's ROIC % falls into.


;
;

Hunan Fangsheng Pharmaceutical Co ROIC % Calculation

Hunan Fangsheng Pharmaceutical 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 )
=204.431 * ( 1 - 11.66% )/( (2060.018 + 2709.246)/ 2 )
=180.5943454/2384.632
=7.57 %

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))
=2922.4 - 670.881 - ( 440.034 - max(0, 999.587 - 1191.088+440.034))
=2060.018

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))
=3080.986 - 699.16 - ( 229.304 - max(0, 1248.089 - 920.669+229.304))
=2709.246

Hunan Fangsheng Pharmaceutical 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 )
=265.748 * ( 1 - 3.19% )/( (2839.757 + 2858.251)/ 2 )
=257.2706388/2849.004
=9.03 %

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))
=3227.098 - 745.123 - ( 217.51 - max(0, 1387.717 - 1029.935+217.51))
=2839.757

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))
=3286.165 - 778.065 - ( 211.971 - max(0, 1394.895 - 1044.744+211.971))
=2858.251

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.


Hunan Fangsheng Pharmaceutical Co  (SHSE:603998) 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, Hunan Fangsheng Pharmaceutical Co's WACC % is 7.77%. Hunan Fangsheng Pharmaceutical Co's ROIC % is 9.16% (calculated using TTM income statement data). Hunan Fangsheng Pharmaceutical Co 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. Hunan Fangsheng Pharmaceutical Co 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.


Hunan Fangsheng Pharmaceutical Co ROIC % Related Terms

Thank you for viewing the detailed overview of Hunan Fangsheng Pharmaceutical Co's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


Hunan Fangsheng Pharmaceutical Co Business Description

Traded in Other Exchanges
N/A
Address
No. 789, Lusong Road, Changsha High-tech Zone, Changsha, CHN
Hunan Fangsheng Pharmaceutical Co Ltd is engaged in pharmaceutical business. The company's business scope covers the production and sales of tablets, capsules, granules, oral suspension, powder, suppository, powder-injection, tinctures, spray lotion, small volume injections, and bulk pharmaceutical chemicals. Its product offerings include Cefixime Tablets, Cefpiramide for Injection, Cefprozil Tablets, Fleroxacin Dispersible Tablets, and others.
Executives
He Shi senior management
Xiao Han Qing senior management
Liu Xin He senior management
Chen Bo Director
Chen Ai Chun Director
Li Zhi Heng senior management
Zhou Wei En senior management
Zhang Qing Hua Director
Huang Min Director
Zhou Xiao Li senior management
Fang Jin Cheng Director
Fang Chuan Long Supervisors
Tan Yuan Ming Director

Hunan Fangsheng Pharmaceutical Co Headlines

No Headlines