Dada Nexus (Dada Nexus) ROC % : -66.24% (As of Mar. 2024)

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What is Dada Nexus 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 %. Dada Nexus's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -66.24%.

As of today (2024-06-01), Dada Nexus's WACC % is 13.22%. Dada Nexus's ROC % is -38.70% (calculated using TTM income statement data). Dada Nexus earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Dada Nexus ROC % Historical Data

The historical data trend for Dada Nexus'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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Dada Nexus ROC % Chart

Dada Nexus Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-90.29

-74.81

-96.26

-69.02

-38.23

Dada Nexus Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															-44.59	-22.08	-25.22	-51.83	-66.24

Dada Nexus ROC % Calculation

Dada Nexus's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-161.189 * ( 1 - 0.26% )	/	( (495.532	+	345.571)	/ 2 )
=	-160.7699086	/	420.5515
=	-38.23 %

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	))
=	1297.503	-	237.331	-	( 564.64	-	max(0, 287.952	-	912.29	+	564.64	))
=	495.532

	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	))
=	1060.738	-	231.799	-	( 483.368	-	max(0, 280.044	-	849.976	+	483.368	))
=	345.571

Dada Nexus's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-202.652 * ( 1 - 0.62% )	/	( (345.571	+	262.539)	/ 2 )
=	-201.3955576	/	304.055
=	-66.24 %

where

	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	))
=	1060.738	-	231.799	-	( 483.368	-	max(0, 280.044	-	849.976	+	483.368	))
=	345.571

	Invested Capital		(Q: Mar. 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	))
=	951.417	-	218.1	-	( 470.778	-	max(0, 219.511	-	758.266	+	470.778	))
=	262.539

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

Dada Nexus (NAS:DADA) 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, Dada Nexus's WACC % is 13.22%. Dada Nexus's ROC % is -38.70% (calculated using TTM income statement data). Dada Nexus 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 %, 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.

Dada Nexus ROC % Related Terms

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Dada Nexus (Dada Nexus) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Dada Nexus Ltd (NAS:DADA) » Definitions » ROC %

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D0A:Germany

Address

No.1088 Yangshupu Road, 22nd Floor, Oriental Fisherman’s Wharf, Yangpu District, Shanghai, CHN, 200082

Website

https://ir.imdada.cn

Dada Nexus is a leading crowdsourced delivery service in China. The company has two core businesses, Dada Now, which is an on-demand delivery platform that provides last-mile and intracity services; and JD Daojia, or JDDJ, which is an online on-demand retail platform that connects consumers to merchants with its delivery capabilities. As of 2022, Dada Now accounted for 34% of revenue while JDDJ accounted for the rest. JDDJ and Dada Nexus merged in 2016, where JD.com received 47.4% ownership of the merged entity in exchange for its JDDJ business. As of June 2023, JD.com and Walmart Inc own 53.9% and 9.3% of Dada Nexus, respectively. Dada Nexus competes with other logistics companies such as SF Intra-City, with Didi in its delivery business, and with Meituan in its on-demand retail segment.