China SXT Pharmaceuticals (China SXT Pharmaceuticals) ROC % : -197.42% (As of Sep. 2023)

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What is China SXT Pharmaceuticals 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 %. China SXT Pharmaceuticals's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was -197.42%.

As of today (2024-06-07), China SXT Pharmaceuticals's WACC % is 16.23%. China SXT Pharmaceuticals's ROC % is -124.52% (calculated using TTM income statement data). China SXT Pharmaceuticals earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China SXT Pharmaceuticals ROC % Historical Data

The historical data trend for China SXT Pharmaceuticals'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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China SXT Pharmaceuticals ROC % Chart

China SXT Pharmaceuticals Annual Data

Trend

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROC %

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49.59

-21.92

-18.30

-41.95

-41.48

China SXT Pharmaceuticals Semi-Annual Data
	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
ROC %	Get a 7-Day Free Trial									-45.71	-32.02	-16.63	-63.63	-197.42

China SXT Pharmaceuticals ROC % Calculation

China SXT Pharmaceuticals's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	-5.608 * ( 1 - 0% )	/	( (13.341	+	13.701)	/ 2 )
=	-5.608	/	13.521
=	-41.48 %

where

	Invested Capital		(A: Mar. 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	))
=	33.546	-	14.875	-	( 15.524	-	max(0, 17.122	-	22.452	+	15.524	))
=	13.341

	Invested Capital		(A: Mar. 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	))
=	29.554	-	10.829	-	( 17.368	-	max(0, 14.497	-	19.521	+	17.368	))
=	13.701

China SXT Pharmaceuticals's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-18.698 * ( 1 - 0% )	/	( (13.701	+	5.241)	/ 2 )
=	-18.698	/	9.471
=	-197.42 %

where

	Invested Capital		(Q: Mar. 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	))
=	29.554	-	10.829	-	( 17.368	-	max(0, 14.497	-	19.521	+	17.368	))
=	13.701

	Invested Capital		(Q: Sep. 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	))
=	14.588	-	5.052	-	( 11.465	-	max(0, 9.2	-	13.495	+	11.465	))
=	5.241

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

China SXT Pharmaceuticals (NAS:SXTC) 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, China SXT Pharmaceuticals's WACC % is 16.23%. China SXT Pharmaceuticals's ROC % is -124.52% (calculated using TTM income statement data). China SXT Pharmaceuticals 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.

China SXT Pharmaceuticals ROC % Related Terms

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China SXT Pharmaceuticals (China SXT Pharmaceuticals) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » China SXT Pharmaceuticals Inc (NAS:SXTC) » Definitions » ROC %

Comparable Companies

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2RY0:Germany

Address

No. 178 Taidong Road North, Jiangsu, Taizhou, CHN, 225300

Website

http://www.sxtchina.com

China SXT Pharmaceuticals Inc is a pharmaceutical company that is focused on the research, development, manufacture, marketing, and sales of Traditional Chinese Medicine Pieces (TCMP), particularly, Advanced TCMP (Directed-oral TCMP, and After-soaking TCMP) which is a sort of Traditional Chinese Medicine (TCM) that has been processed to be ready for use without decoction. Geographically, the firm generates a majority of its revenue from the People's Republic of China.