ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Leader Steel Holdings Bhd's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2024 was -2.00%.
As of today (2025-03-27), Leader Steel Holdings Bhd's WACC % is 4.60%. Leader Steel Holdings Bhd's ROIC % is -4.17% (calculated using TTM income statement data).
Leader Steel Holdings Bhd earns returns that do not match up to its cost of capital. It will destroy value as it grows.
* 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.
Competitive Comparison of Leader Steel Holdings Bhd's ROIC %
For the Steel subindustry, Leader Steel Holdings Bhd'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.
Leader Steel Holdings Bhd's ROIC % Distribution in the Steel Industry
For the Steel industry and Basic Materials sector, Leader Steel Holdings Bhd's ROIC % distribution charts can be found below:
* The bar in red indicates where Leader Steel Holdings Bhd's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Dec. 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.
Leader Steel Holdings Bhd (XKLS:9881) 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, Leader Steel Holdings Bhd's WACC % is 4.60%. Leader Steel Holdings Bhd's ROIC % is -4.17% (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.
Leader Steel Holdings Bhd ROIC % Related Terms
Thank you for viewing the detailed overview of Leader Steel Holdings Bhd's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Leader Steel Holdings Bhd is an investment holding company. It is engaged in the business segment of Manufacturing, processing, and trading of steel and metal products and minerals. The group's steel and metal products include steel pipes and tubes, hollow sections, and steel flat bar, whereas the minerals include iron ore, manganese, mill scales, and slags. Geographically, the company operates in Malaysia, China, Hong Kong, Macau, the United Kingdom, and other countries, of which key revenue is generated from Malaysia.
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