GOME Retail Holdings (HKSE:00493) ROC % : -2.95% (As of Dec. 2023)

View and export this data going back to 1992. Start your Free Trial

What is GOME Retail 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 %. GOME Retail Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -2.95%.

As of today (2024-06-06), GOME Retail Holdings's WACC % is 11.00%. GOME Retail Holdings's ROC % is -5.32% (calculated using TTM income statement data). GOME Retail Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

GOME Retail Holdings ROC % Historical Data

The historical data trend for GOME Retail 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.

* Premium members only.

GOME Retail Holdings ROC % Chart

GOME Retail Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

Get a 7-Day Free Trial

-2.69

-5.90

-6.20

-7.78

-5.22

GOME Retail Holdings 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															-7.62	-5.13	-10.38	-7.55	-2.95

GOME Retail Holdings ROC % Calculation

GOME Retail Holdings'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 )
=	-3241.144 * ( 1 - -0.08% )	/	( (67668.684	+	56722.969)	/ 2 )
=	-3243.7369152	/	62195.8265
=	-5.22 %

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	))
=	47554.681	-	12487.308	-	( 667.866	-	max(0, 45332.109	-	12730.798	+	667.866	))
=	67668.684

	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	))
=	32788.923	-	11892.28	-	( 404.062	-	max(0, 41847.208	-	6020.882	+	404.062	))
=	56722.969

GOME Retail 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 )
=	-1696.324 * ( 1 - -0.34% )	/	( (58634.763	+	56722.969)	/ 2 )
=	-1702.0915016	/	57678.866
=	-2.95 %

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	))
=	38303.708	-	13335.673	-	( 520.09	-	max(0, 39491.909	-	5825.181	+	520.09	))
=	58634.763

	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	))
=	32788.923	-	11892.28	-	( 404.062	-	max(0, 41847.208	-	6020.882	+	404.062	))
=	56722.969

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

GOME Retail Holdings (HKSE:00493) 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, GOME Retail Holdings's WACC % is 11.00%. GOME Retail Holdings's ROC % is -5.32% (calculated using TTM income statement data). GOME Retail Holdings 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.

GOME Retail Holdings ROC % Related Terms

Thank you for viewing the detailed overview of GOME Retail Holdings's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

GOME Retail Holdings (HKSE:00493) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » GOME Retail Holdings Ltd (HKSE:00493) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

CKS2:Germany

Address

8 Finance Street, Suite 2915, 29th Floor, Two International Finance Centre, Central, Hong Kong, HKG

Website

http://www.gome.com.hk

GOME Retail Holdings Ltd is an electrical appliance retailer operating in China and Hong Kong. Its products include audio and video electrical appliances, refrigerating and washing devices, telecommunications devices, and other electronic and technological devices. By geographical segment, the company divides its sales into Chinese regions - Beijing, Guangzhou, Shenzhen, Xi'an, Jinan, Chengdu, Shanghai, and Others. By product categories, revenue is split into Air conditioners, Refrigerators and Washing machines, Telecommunication, Small white appliances, Computer and Digital, and New business.

Executives

Shinning Crown Holdings Inc.	2101 Beneficial owner
Du Juan	2202 Interest of your spouse
Wong Kwong Yu	2201 Interest of corporation controlled by you
Gome Management Limited	2101 Beneficial owner
Ever Ocean Investments Limited	2201 Interest of corporation controlled by you
Trans Asia Inter Capital Limited	2101 Beneficial owner
Yuen Chi Hang Clement
Pinduoduo Inc.	2101 Beneficial owner
Ark Trust (hong Kong) Limited	2301 Trustee

GOME Retail Holdings (HKSE:00493) Headlines

No Headlines