Begbies Traynor Group (LSE:BEG) ROC % : 2.59% (As of Oct. 2023)

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What is Begbies Traynor Group 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 %. Begbies Traynor Group's annualized return on capital (ROC %) for the quarter that ended in Oct. 2023 was 2.59%.

As of today (2024-06-09), Begbies Traynor Group's WACC % is 6.46%. Begbies Traynor Group's ROC % is 0.47% (calculated using TTM income statement data). Begbies Traynor Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Begbies Traynor Group ROC % Historical Data

The historical data trend for Begbies Traynor Group'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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Begbies Traynor Group ROC % Chart

Begbies Traynor Group Annual Data

Trend

Apr14

Apr15

Apr16

Apr17

Apr18

Apr19

Apr20

Apr21

Apr22

Apr23

ROC %

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3.37

1.31

0.21

-0.53

2.95

Begbies Traynor Group Semi-Annual Data
	Apr14	Oct14	Apr15	Oct15	Apr16	Oct16	Apr17	Oct17	Apr18	Oct18	Apr19	Oct19	Apr20	Oct20	Apr21	Oct21	Apr22	Oct22	Apr23	Oct23
ROC %	Get a 7-Day Free Trial															-0.67	-0.39	6.93	-2.23	2.59

Begbies Traynor Group ROC % Calculation

Begbies Traynor Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Apr. 2023 is calculated as:

	ROC % (A: Apr. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Apr. 2022 )	+	Invested Capital (A: Apr. 2023 ))	/ count )
=	7.155 * ( 1 - 51.36% )	/	( (114.745	+	121.156)	/ 2 )
=	3.480192	/	117.9505
=	2.95 %

where

	Invested Capital		(A: Apr. 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	))
=	146.292	-	21.862	-	( 9.685	-	max(0, 42.151	-	59.351	+	9.685	))
=	114.745

	Invested Capital		(A: Apr. 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	))
=	151.881	-	22.724	-	( 8.001	-	max(0, 46.314	-	63.551	+	8.001	))
=	121.156

Begbies Traynor Group's annualized Return on Capital (ROC %) for the quarter that ended in Oct. 2023 is calculated as:

	ROC % (Q: Oct. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Apr. 2023 )	+	Invested Capital (Q: Oct. 2023 ))	/ count )
=	7.772 * ( 1 - 59.91% )	/	( (121.156	+	119.84)	/ 2 )
=	3.1157948	/	120.498
=	2.59 %

where

	Invested Capital		(Q: Apr. 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	))
=	151.881	-	22.724	-	( 8.001	-	max(0, 46.314	-	63.551	+	8.001	))
=	121.156

	Invested Capital		(Q: Oct. 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	))
=	155.889	-	27.988	-	( 8.061	-	max(0, 51.373	-	68.298	+	8.061	))
=	119.84

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

Begbies Traynor Group (LSE:BEG) 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, Begbies Traynor Group's WACC % is 6.46%. Begbies Traynor Group's ROC % is 0.47% (calculated using TTM income statement data). Begbies Traynor Group 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.

Begbies Traynor Group ROC % Related Terms

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Begbies Traynor Group (LSE:BEG) Business Description

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BEG.GB:UK

Address

340 Deansgate, Manchester, GBR, M3 4LY

Website

https://www.begbies-traynorgroup.com

Begbies Traynor Group PLC is a professional services consultancy. It provides insolvency, restructuring and consultancy services to businesses, professional advisors, and financial institutions. It provides professional services, such as business rescue options, advisory options, forensic accounting and investigations, corporate and commercial finance, personal insolvency solutions and services to banking, legal, and accounting sectors. The company is managed as two operating segments: insolvency and advisory services, and property advisory and transactional services. The group generates the majority of its revenue from insolvency and advisory services. The group's principal operations and markets are in the UK.

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