GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Qingdao Choho Industry Co Ltd (SZSE:003033) » Definitions » ROIC %

Qingdao Choho Industry Co (SZSE:003033) ROIC % : 8.00% (As of Mar. 2024)


View and export this data going back to 2021. Start your Free Trial

What is Qingdao Choho Industry 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 %. Qingdao Choho Industry Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 8.00%.

As of today (2024-06-11), Qingdao Choho Industry Co's WACC % is 7.20%. Qingdao Choho Industry Co's ROIC % is 9.18% (calculated using TTM income statement data). Qingdao Choho Industry 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.


Qingdao Choho Industry Co ROIC % Historical Data

The historical data trend for Qingdao Choho Industry 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.

Qingdao Choho Industry Co ROIC % Chart

Qingdao Choho Industry 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 24.02 25.21 11.99 18.79 10.34

Qingdao Choho Industry Co Quarterly Data
Mar19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
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 10.49 10.21 10.17 8.53 8.00

Competitive Comparison of Qingdao Choho Industry Co's ROIC %

For the Auto Parts subindustry, Qingdao Choho Industry 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.


Qingdao Choho Industry Co's ROIC % Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Qingdao Choho Industry Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Qingdao Choho Industry Co's ROIC % falls into.



Qingdao Choho Industry Co ROIC % Calculation

Qingdao Choho Industry 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 )
=149.49 * ( 1 - 5.66% )/( (1166.689 + 1560.458)/ 2 )
=141.028866/1363.5735
=10.34 %

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))
=1743.982 - 234.271 - ( 343.022 - max(0, 548.615 - 903.839+343.022))
=1166.689

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))
=2248.267 - 343.243 - ( 344.566 - max(0, 445.717 - 1055.031+344.566))
=1560.458

Qingdao Choho Industry Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

ROIC % (Q: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2023 ) + Invested Capital (Q: Mar. 2024 ))/ count )
=153.424 * ( 1 - 15.72% )/( (1560.458 + 1673.181)/ 2 )
=129.3057472/1616.8195
=8.00 %

where

Invested Capital(Q: 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))
=2248.267 - 343.243 - ( 344.566 - max(0, 445.717 - 1055.031+344.566))
=1560.458

Invested Capital(Q: Mar. 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))
=2203.3 - 297.734 - ( 232.385 - max(0, 376.05 - 969.016+232.385))
=1673.181

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


Qingdao Choho Industry Co  (SZSE:003033) 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, Qingdao Choho Industry Co's WACC % is 7.20%. Qingdao Choho Industry Co's ROIC % is 9.18% (calculated using TTM income statement data). Qingdao Choho Industry 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. Qingdao Choho Industry 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.


Qingdao Choho Industry Co ROIC % Related Terms

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


Qingdao Choho Industry Co (SZSE:003033) Business Description

Traded in Other Exchanges
N/A
Address
No. 99, Xiamen Road, Economic Development Zone, Shandong Province, Pingdu, Qingdao, CHN, 266700
Qingdao Choho Industry Co Ltd is engaged in the manufacturing and sales of various chain drive systems. It is in the fields of agricultural machinery chain system and industrial automation chain system. It has provided products and technical services to more than 50 companies including Honda, Suzuki, Yamaha, BMW, Grand Yangtze River, Piaggio, Geely, BYD, Jiangling Ford, Knorr-Bremse, and China North Industries group.
Executives
Chen Li Peng Directors, executives
Mou Jia Hai Directors, executives
Xiang Hua Director
Liu Yi Executives
Zheng Lin Kun Directors, executives
Xu Da Zhi Executives
Fang Xiang Supervisors

Qingdao Choho Industry Co (SZSE:003033) Headlines

No Headlines