Webjet (ASX:WEB) ROC % : 5.17% (As of Mar. 2024)

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What is Webjet 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 %. Webjet's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 5.17%.

As of today (2024-05-26), Webjet's WACC % is 13.15%. Webjet's ROC % is 9.01% (calculated using TTM income statement data). Webjet earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Webjet ROC % Historical Data

The historical data trend for Webjet'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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Webjet ROC % Chart

Webjet Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Mar22

Mar23

Mar24

ROC %

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9.09

-8.83

-5.74

5.02

9.84

Webjet Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Sep21	Mar22	Sep22	Mar23	Sep23	Mar24
ROC %	Get a 7-Day Free Trial															-4.05	3.14	7.01	12.92	5.17

Webjet ROC % Calculation

Webjet's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	136.6 * ( 1 - 33.12% )	/	( (936.5	+	920.5)	/ 2 )
=	91.35808	/	928.5
=	9.84 %

where

	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	))
=	1588.2	-	433.7	-	( 513.9	-	max(0, 500.9	-	718.9	+	513.9	))
=	936.5

	Invested Capital		(A: 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	))
=	1800.3	-	523.6	-	( 673.4	-	max(0, 597.2	-	953.4	+	673.4	))
=	920.5

Webjet'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: Sep. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	118.2 * ( 1 - 53.99% )	/	( (1185	+	920.5)	/ 2 )
=	54.38382	/	1052.75
=	5.17 %

where

	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	))
=	1818.1	-	591.6	-	( 666.9	-	max(0, 882.5	-	924	+	666.9	))
=	1185

	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	))
=	1800.3	-	523.6	-	( 673.4	-	max(0, 597.2	-	953.4	+	673.4	))
=	920.5

Note: The Operating Income data used here is two times the semi-annual (Mar. 2024) data.

Webjet (ASX:WEB) 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, Webjet's WACC % is 13.15%. Webjet's ROC % is 9.01% (calculated using TTM income statement data). Webjet 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.

Webjet ROC % Related Terms

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Webjet (ASX:WEB) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

WBJ:Germany

Address

509 St Kilda Road, Level 2, Melbourne, VIC, AUS, 3004

Website

https://www.webjetlimited.com

Webjet provides online travel bookings across Europe, Asia Pacific, the Middle East, and Africa. The group operates in both the business to consumer, or B2C, and business to business, or B2B, segments. The B2B business, WebBeds, acts as an intermediary between hotels and wholesale/retail travel service providers. WebBeds is currently the world's second largest B2B accommodation booking provider despite only a circa 4% market share of the fragmented AUD 70 billion global B2B accommodation market. The company's B2C units, Webjet Online Travel Agent, or OTA, and GoSee allow retail customers to book flights, hotel accommodation, holiday packages, travel insurance, rental cars and caravans online.