GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Zhen Ding Technology Holding Ltd (TPE:4958) » Definitions » ROIC %

Zhen Ding Technology Holding (TPE:4958) ROIC % : 13.51% (As of Sep. 2024)


View and export this data going back to 2011. Start your Free Trial

What is Zhen Ding Technology Holding 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 %. Zhen Ding Technology Holding's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 13.51%.

As of today (2024-12-13), Zhen Ding Technology Holding's WACC % is 7.64%. Zhen Ding Technology Holding's ROIC % is 6.85% (calculated using TTM income statement data). Zhen Ding Technology Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Zhen Ding Technology Holding ROIC % Historical Data

The historical data trend for Zhen Ding Technology Holding'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.

Zhen Ding Technology Holding ROIC % Chart

Zhen Ding Technology Holding 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 17.91 13.67 11.61 13.91 5.27

Zhen Ding Technology Holding 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 7.62 12.87 1.63 -2.10 13.51

Competitive Comparison of Zhen Ding Technology Holding's ROIC %

For the Electronic Components subindustry, Zhen Ding Technology Holding'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.


Zhen Ding Technology Holding's ROIC % Distribution in the Hardware Industry

For the Hardware industry and Technology sector, Zhen Ding Technology Holding's ROIC % distribution charts can be found below:

* The bar in red indicates where Zhen Ding Technology Holding's ROIC % falls into.



Zhen Ding Technology Holding ROIC % Calculation

Zhen Ding Technology Holding'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 )
=9169.684 * ( 1 - 6.13% )/( (157776.39 + 168829.234)/ 2 )
=8607.5823708/163302.812
=5.27 %

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))
=232560.112 - 38717.648 - ( 57151.313 - max(0, 74226.905 - 110292.979+57151.313))
=157776.39

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))
=242775.665 - 38840.1 - ( 65970.039 - max(0, 78939.342 - 114045.673+65970.039))
=168829.234

Zhen Ding Technology Holding'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 )
=23895.636 * ( 1 - 9.98% )/( (159760.468 + 158752.223)/ 2 )
=21510.8515272/159256.3455
=13.51 %

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))
=246563.088 - 37479.395 - ( 69461.476 - max(0, 64720.422 - 114043.647+69461.476))
=159760.468

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))
=259685.496 - 44559.744 - ( 64714.432 - max(0, 71999.856 - 128373.385+64714.432))
=158752.223

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.


Zhen Ding Technology Holding  (TPE:4958) 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, Zhen Ding Technology Holding's WACC % is 7.64%. Zhen Ding Technology Holding's ROIC % is 6.85% (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.


Zhen Ding Technology Holding ROIC % Related Terms

Thank you for viewing the detailed overview of Zhen Ding Technology Holding's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


Zhen Ding Technology Holding Business Description

Traded in Other Exchanges
N/A
Address
No. 6, Lane 28, Sanhe Road, Sanshili, Dayuan District, Taoyuan, TWN
Zhen Ding Technology Holding Ltd manufactures printed circuit boards, including high-density interconnection, flexible printed circuits, rigid printed circuit boards, and integrated circuit substrates. These products are used in a variety of applications, including personal computers, watches, memory and data cards, smartphones, tablets, media players, televisions, digital and video cameras, and game consoles. The company's customers include the telecommunications, electronics, automotive, medical equipment, military equipment, and space industries. The company generates all of its revenue from the manufacturing of PCB products of which major revenue is derived from the USA region followed by mainland China.

Zhen Ding Technology Holding Headlines

No Headlines