Peter Warren Automotive Holdings (ASX:PWR) ROC % : 6.28% (As of Dec. 2023)

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What is Peter Warren Automotive Holdings ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Peter Warren Automotive Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 6.28%.

As of today (2024-06-08), Peter Warren Automotive Holdings's WACC % is 4.88%. Peter Warren Automotive Holdings's ROC % is 6.21% (calculated using TTM income statement data). Peter Warren Automotive Holdings 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.

Peter Warren Automotive Holdings ROC % Historical Data

The historical data trend for Peter Warren Automotive Holdings's ROC % 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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Peter Warren Automotive Holdings ROC % Chart

Peter Warren Automotive Holdings Annual Data

Trend

Jun21

Jun22

Jun23

ROC %

6.95

7.26

6.65

Peter Warren Automotive Holdings Semi-Annual Data
	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial			5.91	7.59	6.89	6.29	6.28

Peter Warren Automotive Holdings ROC % Calculation

Peter Warren Automotive Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	96.973 * ( 1 - 30.52% )	/	( (958.294	+	1067.066)	/ 2 )
=	67.3768404	/	1012.68
=	6.65 %

where

	Invested Capital		(A: Jun. 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	))
=	1101.442	-	94.201	-	( 52.177	-	max(0, 350.743	-	399.69	+	52.177	))
=	958.294

	Invested Capital		(A: Jun. 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	))
=	1204.854	-	87.153	-	( 50.635	-	max(0, 433.943	-	493.288	+	50.635	))
=	1067.066

Peter Warren Automotive Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	103.608 * ( 1 - 30.26% )	/	( (1067.066	+	1235.858)	/ 2 )
=	72.2562192	/	1151.462
=	6.28 %

where

	Invested Capital		(Q: Jun. 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	))
=	1204.854	-	87.153	-	( 50.635	-	max(0, 433.943	-	493.288	+	50.635	))
=	1067.066

	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	))
=	1342.433	-	82.663	-	( 23.912	-	max(0, 539.826	-	575.14	+	23.912	))
=	1235.858

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Peter Warren Automotive Holdings (ASX:PWR) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. 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 ROC % 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, Peter Warren Automotive Holdings's WACC % is 4.88%. Peter Warren Automotive Holdings's ROC % is 6.21% (calculated using TTM income statement data). Peter Warren Automotive Holdings 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.

Be Aware

Like ROE % and ROA %, ROC % 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.

Peter Warren Automotive Holdings ROC % Related Terms

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Peter Warren Automotive Holdings (ASX:PWR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Peter Warren Automotive Holdings Ltd (ASX:PWR) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

13 Hume Highway, Warwick Farm, Sydney, NSW, AUS, 2170

Website

https://www.peterwarren.com.au

Peter Warren Automotive Holdings Ltd is a dealership group operating in Australia. The company operates an integrated new and used car retailing business providing the full range of sales and support including parts, service, finance and insurance and aftermarket products to an extensive list of long-term customers, many of whom have purchased multiple vehicles over a life time. The company has two operating segments Vehicle Retailing and property segment, The company generates the majority of its revenue from the Vehicle Retailing segment, which offers a diversified range of automotive products and services, including new vehicles, used vehicles, vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products, and other aftermarket products.