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Hatch Work Co (TSE:148A) ROIC % : 24.67% (As of Dec. 2023)


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What is Hatch Work 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 %. Hatch Work Co's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 24.67%.

As of today (2024-05-14), Hatch Work Co's WACC % is 5.95%. Hatch Work Co's ROIC % is 6.34% (calculated using TTM income statement data). Hatch Work 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.


Hatch Work Co ROIC % Historical Data

The historical data trend for Hatch Work 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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Hatch Work Co ROIC % Chart

Hatch Work Co Annual Data
Trend Dec21 Dec22 Dec23
ROIC %
-37.03 -31.28 4.39

Hatch Work Co Quarterly Data
Dec21 Dec22 Sep23 Dec23
ROIC % - - - 24.67

Competitive Comparison of Hatch Work Co's ROIC %

For the Specialty Business Services subindustry, Hatch Work 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.


Hatch Work Co's ROIC % Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Hatch Work Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Hatch Work Co's ROIC % falls into.



Hatch Work Co ROIC % Calculation

Hatch Work 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 )
=21.281 * ( 1 - -180.17% )/( (1281.887 + 1436.504)/ 2 )
=59.6229777/1359.1955
=4.39 %

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))
=1748.655 - 77.296 - ( 1235.289 - max(0, 1090.577 - 1480.049+1235.289))
=1281.887

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))
=1838.204 - 119.449 - ( 1134.501 - max(0, 1240.712 - 1522.963+1134.501))
=1436.504

Hatch Work Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

ROIC % (Q: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Sep. 2023 ) + Invested Capital (Q: Dec. 2023 ))/ count )
=139.072 * ( 1 - -148.09% )/( (1360.355 + 1436.504)/ 2 )
=345.0237248/1398.4295
=24.67 %

where

Invested Capital(Q: Sep. 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))
=1738.949 - 106.269 - ( 1119.283 - max(0, 1210.633 - 1482.958+1119.283))
=1360.355

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))
=1838.204 - 119.449 - ( 1134.501 - max(0, 1240.712 - 1522.963+1134.501))
=1436.504

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) 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.


Hatch Work Co  (TSE:148A) 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, Hatch Work Co's WACC % is 5.95%. Hatch Work Co's ROIC % is 6.34% (calculated using TTM income statement data). Hatch Work 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. Hatch Work 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.


Hatch Work Co ROIC % Related Terms

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Hatch Work Co (TSE:148A) Business Description

Comparable Companies
Traded in Other Exchanges
N/A
Address
DF Building 2-2-8 Minamiaoyama, Minato-ku, Tokyo, JPN, 107-0062
Hatch Work Co Ltd provides the monthly parking search portalsite "At Parking", the monthly parking online management support service "At Parking Cloud" and the rental meeting room service "At Business Center".

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