SMS Electric Co Zhengzhou (SZSE:002857) ROIC % : -12.19% (As of Mar. 2024)

View and export this data going back to 2017. Start your Free Trial

What is SMS Electric Co Zhengzhou 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 %. SMS Electric Co Zhengzhou's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was -12.19%.

As of today (2024-05-26), SMS Electric Co Zhengzhou's WACC % is 10.66%. SMS Electric Co Zhengzhou's ROIC % is 0.20% (calculated using TTM income statement data). SMS Electric Co Zhengzhou earns returns that do not match up to its cost of capital. It will destroy value as it grows.

SMS Electric Co Zhengzhou ROIC % Historical Data

The historical data trend for SMS Electric Co Zhengzhou'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.

* Premium members only.

SMS Electric Co Zhengzhou ROIC % Chart

SMS Electric Co Zhengzhou Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

Get a 7-Day Free Trial

11.93

9.15

6.55

5.46

-1.02

SMS Electric Co Zhengzhou Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROIC %	Get a 7-Day Free Trial															-18.96	-3.90	-2.44	17.87	-12.19

Competitive Comparison of SMS Electric Co Zhengzhou's ROIC %

For the Scientific & Technical Instruments subindustry, SMS Electric Co Zhengzhou'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.

SMS Electric Co Zhengzhou's ROIC % Distribution in the Hardware Industry

For the Hardware industry and Technology sector, SMS Electric Co Zhengzhou's ROIC % distribution charts can be found below:

* The bar in red indicates where SMS Electric Co Zhengzhou's ROIC % falls into.

SMS Electric Co Zhengzhou ROIC % Calculation

SMS Electric Co Zhengzhou's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-2.784 * ( 1 - 27.13% )	/	( (207.345	+	190.954)	/ 2 )
=	-2.0287008	/	199.1495
=	-1.02 %

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	))
=	656.002	-	112.145	-	( 336.512	-	max(0, 128.679	-	514.36	+	336.512	))
=	207.345

	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	))
=	772.365	-	212.088	-	( 369.323	-	max(0, 227.225	-	602.545	+	369.323	))
=	190.954

SMS Electric Co Zhengzhou's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROIC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-19.736 * ( 1 - -28.06% )	/	( (190.954	+	223.772)	/ 2 )
=	-25.2739216	/	207.363
=	-12.19 %

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	))
=	772.365	-	212.088	-	( 369.323	-	max(0, 227.225	-	602.545	+	369.323	))
=	190.954

	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	))
=	711.222	-	168.635	-	( 318.815	-	max(0, 185.918	-	542.253	+	318.815	))
=	223.772

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

SMS Electric Co Zhengzhou (SZSE:002857) 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, SMS Electric Co Zhengzhou's WACC % is 10.66%. SMS Electric Co Zhengzhou's ROIC % is 0.20% (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.

SMS Electric Co Zhengzhou ROIC % Related Terms

Thank you for viewing the detailed overview of SMS Electric Co Zhengzhou's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.

SMS Electric Co Zhengzhou (SZSE:002857) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » SMS Electric Co Ltd Zhengzhou (SZSE:002857) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

SMS Industrial Park at No. 85 Fifth Avenue, Economic and Technical Development Zone, Zhengzhou, CHN, 450016

Website

http://www.cnsms.com

SMS Electric Co Ltd Zhengzhou is engaged in the research, design, producing and sale of electricity metering instrument in China. It offers testing automation products, energy meter terminals, standard test devices, portable meter test systems, simulation equipment, and transformers.

Executives

Yu Yi Zhou	Directors, executives
Wang Hong	Directors, executives

SMS Electric Co Zhengzhou (SZSE:002857) Headlines

No Headlines