Hubei Guochuang Hi-Tech Material Co (SZSE:002377) ROC % : -4.84% (As of Mar. 2024)

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What is Hubei Guochuang Hi-Tech Material 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 %. Hubei Guochuang Hi-Tech Material Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -4.84%.

As of today (2024-06-08), Hubei Guochuang Hi-Tech Material Co's WACC % is 13.41%. Hubei Guochuang Hi-Tech Material Co's ROC % is -6.08% (calculated using TTM income statement data). Hubei Guochuang Hi-Tech Material Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Hubei Guochuang Hi-Tech Material Co ROC % Historical Data

The historical data trend for Hubei Guochuang Hi-Tech Material 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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Hubei Guochuang Hi-Tech Material Co ROC % Chart

Hubei Guochuang Hi-Tech Material Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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7.76

0.70

-17.60

-17.70

-7.19

Hubei Guochuang Hi-Tech Material Co 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															-10.06	-15.32	0.01	-4.45	-4.84

Hubei Guochuang Hi-Tech Material Co ROC % Calculation

Hubei Guochuang Hi-Tech Material 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 )
=	-72.977 * ( 1 - 3.58% )	/	( (1101.751	+	854.741)	/ 2 )
=	-70.3644234	/	978.246
=	-7.19 %

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	))
=	1800.681	-	487.141	-	( 251.227	-	max(0, 1034.539	-	1246.328	+	251.227	))
=	1101.751

	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	))
=	1017.924	-	105.775	-	( 57.408	-	max(0, 462.771	-	620.75	+	57.408	))
=	854.741

Hubei Guochuang Hi-Tech Material Co'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 )
=	-42.22 * ( 1 - 2.88% )	/	( (854.741	+	840.769)	/ 2 )
=	-41.004064	/	847.755
=	-4.84 %

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	))
=	1017.924	-	105.775	-	( 57.408	-	max(0, 462.771	-	620.75	+	57.408	))
=	854.741

	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	))
=	1032.81	-	108.937	-	( 83.104	-	max(0, 484.419	-	639.353	+	83.104	))
=	840.769

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

Hubei Guochuang Hi-Tech Material Co (SZSE:002377) 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, Hubei Guochuang Hi-Tech Material Co's WACC % is 13.41%. Hubei Guochuang Hi-Tech Material Co's ROC % is -6.08% (calculated using TTM income statement data). Hubei Guochuang Hi-Tech Material 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.

Hubei Guochuang Hi-Tech Material Co ROC % Related Terms

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Hubei Guochuang Hi-Tech Material Co (SZSE:002377) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Building Materials » Hubei Guochuang Hi-Tech Material Co Ltd (SZSE:002377) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

No. 8, Wudayuan 3rd Road, Donghu New Technology Development Zone, Hubei, Wuhan, CHN, 430223

Website

http://www.guochuang.com.cn

Hubei Guochuang Hi-Tech Material Co Ltd is a China-based company specializing in the research, design, production, and sales of modified asphalt, emulsified asphalt and other road materials and equipment. The materials are used for highways, electronic information, bioengineering, environmental engineering technology development and application, undertake modified asphalt road pavement projects, import and export of goods, and technology import and export. The product portfolio of the company includes modified asphalt, colored asphalt, cement asphalt mortar, and other products.

Executives

Peng Ya Chao	Directors, Directors, and Executives
Lv Hua Sheng	Directors, executives
Meng Jun Mei	Executives
Li Mou Yu	Executives
Ji Yong Hai	Executives
He Bin	Supervisors
Zhang Jing Jing	Supervisors
Wu Xin Mu	Independent director
Peng Bin	Directors, executives
Qian Jing	Directors, executives
Hao Li Qun	Director
Gao Tao	Directors, executives
Yin Shi Ming	Executives
Gao Qing Shou	Director
Hu Ling	Executives

Hubei Guochuang Hi-Tech Material Co (SZSE:002377) Headlines

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