Miramar Hotel & Investment Co (HKSE:00071) ROC % : 7.35% (As of Dec. 2023)

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What is Miramar Hotel & Investment Co 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 %. Miramar Hotel & Investment Co's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 7.35%.

As of today (2024-06-06), Miramar Hotel & Investment Co's WACC % is 6.55%. Miramar Hotel & Investment Co's ROC % is 5.50% (calculated using TTM income statement data). Miramar Hotel & Investment Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Miramar Hotel & Investment Co ROC % Historical Data

The historical data trend for Miramar Hotel & Investment Co'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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Miramar Hotel & Investment Co ROC % Chart

Miramar Hotel & Investment Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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5.58

2.82

2.72

3.28

5.50

Miramar Hotel & Investment Co Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															3.05	2.18	4.41	3.66	7.35

Miramar Hotel & Investment Co ROC % Calculation

Miramar Hotel & Investment Co'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 )
=	970.933 * ( 1 - 9.82% )	/	( (15716.576	+	16145.75)	/ 2 )
=	875.5873794	/	15931.163
=	5.50 %

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	))
=	21245.01	-	373.617	-	( 5444.366	-	max(0, 625.412	-	5780.229	+	5444.366	))
=	15716.576

	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	))
=	21971.103	-	505.338	-	( 5658.187	-	max(0, 741.945	-	6061.96	+	5658.187	))
=	16145.75

Miramar Hotel & Investment Co'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 )
=	1274.466 * ( 1 - 7.47% )	/	( (15923.216	+	16145.75)	/ 2 )
=	1179.2633898	/	16034.483
=	7.35 %

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	))
=	21620.892	-	622.429	-	( 5627.651	-	max(0, 902.803	-	5978.05	+	5627.651	))
=	15923.216

	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	))
=	21971.103	-	505.338	-	( 5658.187	-	max(0, 741.945	-	6061.96	+	5658.187	))
=	16145.75

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

Miramar Hotel & Investment Co (HKSE:00071) 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, Miramar Hotel & Investment Co's WACC % is 6.55%. Miramar Hotel & Investment Co's ROC % is 5.50% (calculated using TTM income statement data). Miramar Hotel & Investment 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 %, 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.

Miramar Hotel & Investment Co ROC % Related Terms

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Miramar Hotel & Investment Co (HKSE:00071) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Miramar Hotel & Investment Co Ltd (HKSE:00071) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

132 Nathan Road, 15th Floor, Mira Place Tower A, Tsim Sha Tsui, Kowloon, Hong Kong, HKG

Website

https://www.miramar-group.com

Miramar Hotel & Investment Co Ltd is an investment holding company. It operates in five segments: Property rental, which includes leasing of office and retail premises to generate rental income and to gain from the appreciation in properties values in the long term; Hotels & serviced apartments segment operates hotels and serviced apartments and provision of hotel management services; Food & beverage operation segment operates restaurants; Travel operation segment is engaged in the operation of travel agency services; and Others. Its geographical segments are Hong Kong and China, of which Hong Kong accounts for the majority of its revenue.

Executives

Lee Ka Shing	2501 Other
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Aynbury Investments Limited	2201 Interest of corporation controlled by you
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Henderson Land Development Company Limited	2201 Interest of corporation controlled by you
Hopkins (cayman) Limited	2201 Interest of corporation controlled by you
Riddick (cayman) Limited	2301 Trustee
Rimmer (cayman) Limited	2301 Trustee
Lee Shau Kee	2501 Other

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