DDC Enterprise (DDC Enterprise) ROIC % : 0.73% (As of Sep. 2023)

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What is DDC Enterprise ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. DDC Enterprise's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was 0.73%.

As of today (2024-05-03), DDC Enterprise's WACC % is 9.55%. DDC Enterprise's ROIC % is -6.73% (calculated using TTM income statement data). DDC Enterprise earns returns that do not match up to its cost of capital. It will destroy value as it grows.

DDC Enterprise ROIC % Historical Data

The historical data trend for DDC Enterprise's ROIC % 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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DDC Enterprise ROIC % Chart

DDC Enterprise Annual Data

Trend

Dec20

Dec21

Dec22

ROIC %

-56.82

-62.87

-36.99

DDC Enterprise Quarterly Data
	Dec20	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23
ROIC %	Get a 7-Day Free Trial				-	-6.21	-90.59	-1.97	0.73

Competitive Comparison of DDC Enterprise's ROIC %

For the Packaged Foods subindustry, DDC Enterprise's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

DDC Enterprise's ROIC % Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, DDC Enterprise's ROIC % distribution charts can be found below:

* The bar in red indicates where DDC Enterprise's ROIC % falls into.

DDC Enterprise ROIC % Calculation

DDC Enterprise's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROIC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	-11.476 * ( 1 - -2.62% )	/	( (31.124	+	32.548)	/ 2 )
=	-11.7766712	/	31.836
=	-36.99 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	35.875	-	13.79	-	( 2.119	-	max(0, 27.796	-	18.757	+	2.119	))
=	31.124

	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	))
=	36.631	-	19.309	-	( 3.844	-	max(0, 37.551	-	22.325	+	3.844	))
=	32.548

DDC Enterprise's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROIC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	0.212 * ( 1 - -29.54% )	/	( (37.498	+	0)	/ 1 )
=	0.2746248	/	37.498
=	0.73 %

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	))
=	39.14	-	20.613	-	( 3.111	-	max(0, 42.212	-	23.241	+	3.111	))
=	37.498

	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	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) data.

DDC Enterprise (AMEX:DDC) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, DDC Enterprise's WACC % is 9.55%. DDC Enterprise's ROIC % is -6.73% (calculated using TTM income statement data).

Be Aware

Like ROE % and ROA %, ROIC % 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.

DDC Enterprise ROIC % Related Terms

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DDC Enterprise (DDC Enterprise) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » DDC Enterprise Ltd (AMEX:DDC) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

233 Hollywood Road, Room 1601-1602, 16th Floor, Hollywood Centre, Sheung Wan, HKG

Website

https://www.daydaycook.com.cn

DDC Enterprise Ltd is a content driven consumer brand offering easy, convenient ready-to-heat , ready-to-cook and plant-based meal products i.e. meal products consisting largely or solely of vegetables, fruits, grains and other foods derived from plant-based protein, rather than animal protein) while promoting healthier lifestyle choices to Millennial and Generation Z customer-base. It is also engaged in the provision of advertising services and the operation of experience stores to offer cooking classes.