Zhejiang XinNong Chemical Co (SZSE:002942) ROIC % : 2.72% (As of Sep. 2024)

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What is Zhejiang XinNong Chemical 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 %. Zhejiang XinNong Chemical Co's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 2.72%.

As of today (2024-12-15), Zhejiang XinNong Chemical Co's WACC % is 10.54%. Zhejiang XinNong Chemical Co's ROIC % is 3.87% (calculated using TTM income statement data). Zhejiang XinNong Chemical Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Zhejiang XinNong Chemical Co ROIC % Historical Data

The historical data trend for Zhejiang XinNong Chemical 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.

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Zhejiang XinNong Chemical Co ROIC % Chart

Zhejiang XinNong Chemical Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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26.66

28.90

18.97

12.70

-3.06

Zhejiang XinNong Chemical 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															-2.86	-16.68	14.96	15.62	2.72

Competitive Comparison of Zhejiang XinNong Chemical Co's ROIC %

For the Agricultural Inputs subindustry, Zhejiang XinNong Chemical 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.

Zhejiang XinNong Chemical Co's ROIC % Distribution in the Agriculture Industry

For the Agriculture industry and Basic Materials sector, Zhejiang XinNong Chemical Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Zhejiang XinNong Chemical Co's ROIC % falls into.

Zhejiang XinNong Chemical Co ROIC % Calculation

Zhejiang XinNong Chemical 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 )
=	-28.892 * ( 1 - 16.42% )	/	( (777.47	+	801.039)	/ 2 )
=	-24.1479336	/	789.2545
=	-3.06 %

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	))
=	1640.8	-	407.101	-	( 517.767	-	max(0, 445.871	-	902.1	+	517.767	))
=	777.47

	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	))
=	1476.011	-	283.114	-	( 475.928	-	max(0, 329.616	-	721.474	+	475.928	))
=	801.039

Zhejiang XinNong Chemical 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 )
=	15.828 * ( 1 - -35.36% )	/	( (777.224	+	799.153)	/ 2 )
=	21.4247808	/	788.1885
=	2.72 %

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	))
=	1561.337	-	335.158	-	( 530.426	-	max(0, 370.657	-	819.612	+	530.426	))
=	777.224

	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	))
=	1615.156	-	357.953	-	( 595.806	-	max(0, 414.459	-	872.509	+	595.806	))
=	799.153

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

Zhejiang XinNong Chemical Co (SZSE:002942) 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, Zhejiang XinNong Chemical Co's WACC % is 10.54%. Zhejiang XinNong Chemical Co's ROIC % is 3.87% (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.

Zhejiang XinNong Chemical Co ROIC % Related Terms

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Zhejiang XinNong Chemical Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Agriculture » Zhejiang XinNong Chemical Co Ltd (SZSE:002942) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

258 Zhonghe Middle Road, 18th Floor, Richful International Trade Plaza, Zhejiang, Hangzhou, CHN, 310003

Website

http://www.xnchem.com

Zhejiang XinNong Chemical Co Ltd is engaged in pesticide research, development, production and marketing activities. The company's production bases are Xianju, Jiaojiang of Zhejiang and Rudong of Jiangsu.

Executives

Zhang Jian Rong	Directors, executives
Xu Guan Shou	Independent director

Zhejiang XinNong Chemical Co Headlines

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