Beijing Trust&Far Technology Co (SZSE:300231) ROIC % : 2.74% (As of Sep. 2024)

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What is Beijing Trust&Far Technology 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 %. Beijing Trust&Far Technology Co's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 2.74%.

As of today (2025-04-03), Beijing Trust&Far Technology Co's WACC % is 14.14%. Beijing Trust&Far Technology Co's ROIC % is 3.77% (calculated using TTM income statement data). Beijing Trust&Far Technology Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Beijing Trust&Far Technology Co ROIC % Historical Data

The historical data trend for Beijing Trust&Far Technology 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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Beijing Trust&Far Technology Co ROIC % Chart

Beijing Trust&Far Technology Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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12.49

14.80

14.27

11.98

8.27

Beijing Trust&Far Technology 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															9.59	3.18	4.58	6.08	2.74

Competitive Comparison of Beijing Trust&Far Technology Co's ROIC %

For the Information Technology Services subindustry, Beijing Trust&Far Technology 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.

Beijing Trust&Far Technology Co's ROIC % Distribution in the Software Industry

For the Software industry and Technology sector, Beijing Trust&Far Technology Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Beijing Trust&Far Technology Co's ROIC % falls into.

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Beijing Trust&Far Technology Co ROIC % Calculation

Beijing Trust&Far Technology 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 )
=	173.055 * ( 1 - 16.57% )	/	( (1848.339	+	1644.869)	/ 2 )
=	144.3797865	/	1746.604
=	8.27 %

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	))
=	2755.149	-	342.666	-	( 564.144	-	max(0, 813.095	-	1997.32	+	564.144	))
=	1848.339

	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	))
=	2512.18	-	281.916	-	( 585.395	-	max(0, 512.392	-	1730.699	+	585.395	))
=	1644.869

Beijing Trust&Far Technology 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 )
=	66.824 * ( 1 - 16.83% )	/	( (1893.008	+	2166.636)	/ 2 )
=	55.5775208	/	2029.822
=	2.74 %

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	))
=	2437.43	-	258.007	-	( 286.415	-	max(0, 488.269	-	1658.335	+	286.415	))
=	1893.008

	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	))
=	2788.852	-	291.656	-	( 330.56	-	max(0, 829.641	-	2013.283	+	330.56	))
=	2166.636

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

Beijing Trust&Far Technology Co (SZSE:300231) 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, Beijing Trust&Far Technology Co's WACC % is 14.14%. Beijing Trust&Far Technology Co's ROIC % is 3.77% (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.

Beijing Trust&Far Technology Co ROIC % Related Terms

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Beijing Trust&Far Technology Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Beijing Trust&Far Technology Co Ltd (SZSE:300231) » Definitions » ROIC %

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Traded in Other Exchanges

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Address

No. 29 Suzhou Street, Room 071, 12th Floor, Via Building, Haidian District, Beijing, CHN, 100080

Website

http://www.trustfar.cn

Beijing Trust&Far Technology Co Ltd is a China-based company engages in the provision of information technology (IT) operation and maintenance management software such as IT basic resource monitoring, business transaction monitoring, process management, and data analysis software.

Executives

Zhan Li Xiong	Director
Li Hong Gang	Executives
Yi Fang	Securities Affairs Representative
Lin Jing Ying	Directors, Directors, and Executives
Wang Yan Hua	Supervisors
Zhu Yuan Hui	Director

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