Raily Aesthetic Medicine International Holdings (HKSE:02135) ROIC % : -2.84% (As of Jun. 2023)

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What is Raily Aesthetic Medicine International Holdings 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 %. Raily Aesthetic Medicine International Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2023 was -2.84%.

As of today (2024-05-17), Raily Aesthetic Medicine International Holdings's WACC % is 6.12%. Raily Aesthetic Medicine International Holdings's ROIC % is -10.18% (calculated using TTM income statement data). Raily Aesthetic Medicine International Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Raily Aesthetic Medicine International Holdings ROIC % Historical Data

The historical data trend for Raily Aesthetic Medicine International Holdings'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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Raily Aesthetic Medicine International Holdings ROIC % Chart

Raily Aesthetic Medicine International Holdings Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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10.05

4.97

-7.95

-6.94

-10.08

Raily Aesthetic Medicine International Holdings Semi-Annual Data
	Dec17	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROIC %	Get a 7-Day Free Trial							-11.03	0.04	-15.05	-2.84	-17.64

Competitive Comparison of Raily Aesthetic Medicine International Holdings's ROIC %

For the Medical Care Facilities subindustry, Raily Aesthetic Medicine International Holdings'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.

Raily Aesthetic Medicine International Holdings's ROIC % Distribution in the Healthcare Providers & Services Industry

For the Healthcare Providers & Services industry and Healthcare sector, Raily Aesthetic Medicine International Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Raily Aesthetic Medicine International Holdings's ROIC % falls into.

Raily Aesthetic Medicine International Holdings ROIC % Calculation

Raily Aesthetic Medicine International Holdings'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 )
=	-22.519 * ( 1 - 8.39% )	/	( (336.999	+	257.769)	/ 2 )
=	-20.6296559	/	297.384
=	-6.94 %

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	))
=	422.105	-	41.376	-	( 149.041	-	max(0, 141.184	-	184.914	+	149.041	))
=	336.999

	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	))
=	337.975	-	39.841	-	( 87.974	-	max(0, 85.332	-	125.697	+	87.974	))
=	257.769

Raily Aesthetic Medicine International Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2023 is calculated as:

	ROIC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2022 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	-4.976 * ( 1 - -46.5% )	/	( (257.769	+	255)	/ 2 )
=	-7.28984	/	256.3845
=	-2.84 %

where

	Invested Capital		(Q: 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	))
=	337.975	-	39.841	-	( 87.974	-	max(0, 85.332	-	125.697	+	87.974	))
=	257.769

	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	))
=	334.548	-	39.643	-	( 65.239	-	max(0, 91.461	-	131.366	+	65.239	))
=	255

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

Raily Aesthetic Medicine International Holdings (HKSE:02135) 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, Raily Aesthetic Medicine International Holdings's WACC % is 6.12%. Raily Aesthetic Medicine International Holdings's ROIC % is -10.18% (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.

Raily Aesthetic Medicine International Holdings ROIC % Related Terms

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Raily Aesthetic Medicine International Holdings (HKSE:02135) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » Raily Aesthetic Medicine International Holdings Ltd (HKSE:02135) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 290 North Zhongshan Road, 3-5th Floor, Minhang Tower, Gongshu District, Hangzhou, CHN

Website

http://m.raily.com

Raily Aesthetic Medicine International Holdings Ltd is an aesthetic medical service provider in Zhejiang Province, the PRC. It offers a broad range of aesthetic medical services to clients to meet their different aesthetic and anti-aging objectives. The group is organized into business units based on their services and has three reportable operating segments namely Aesthetic medical services which comprise principally inpatient services including surgical services and outpatient services including injection service, dermatology services, and others; and Consulting service segment which comprise principally management consulting services. Aesthetic medical equipment products comprise principally sales of surgical implants and aesthetic medical skincare products.

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