Tokyo Ohka Kogyo Co (TSE:4186) ROC % : 10.02% (As of Mar. 2024)

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What is Tokyo Ohka Kogyo 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 %. Tokyo Ohka Kogyo Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 10.02%.

As of today (2024-05-27), Tokyo Ohka Kogyo Co's WACC % is 7.68%. Tokyo Ohka Kogyo Co's ROC % is 10.43% (calculated using TTM income statement data). Tokyo Ohka Kogyo Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Tokyo Ohka Kogyo Co ROC % Historical Data

The historical data trend for Tokyo Ohka Kogyo 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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Tokyo Ohka Kogyo Co ROC % Chart

Tokyo Ohka Kogyo Co Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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6.35

9.64

12.11

16.58

10.82

Tokyo Ohka Kogyo 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															10.18	9.31	7.93	14.34	10.02

Tokyo Ohka Kogyo Co ROC % Calculation

Tokyo Ohka Kogyo 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 )
=	22707 * ( 1 - 26.76% )	/	( (146047	+	161323)	/ 2 )
=	16630.6068	/	153685
=	10.82 %

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	))
=	238075	-	32658	-	( 59370	-	max(0, 40781	-	130636	+	59370	))
=	146047

	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	))
=	251864	-	29726	-	( 60815	-	max(0, 38627	-	134328	+	60815	))
=	161323

Tokyo Ohka Kogyo 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 )
=	23176 * ( 1 - 29.4% )	/	( (161323	+	165161)	/ 2 )
=	16362.256	/	163242
=	10.02 %

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	))
=	251864	-	29726	-	( 60815	-	max(0, 38627	-	134328	+	60815	))
=	161323

	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	))
=	261044	-	25470	-	( 70413	-	max(0, 45615	-	143825	+	70413	))
=	165161

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

Tokyo Ohka Kogyo Co (TSE:4186) 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, Tokyo Ohka Kogyo Co's WACC % is 7.68%. Tokyo Ohka Kogyo Co's ROC % is 10.43% (calculated using TTM income statement data). Tokyo Ohka Kogyo Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

Tokyo Ohka Kogyo Co ROC % Related Terms

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Tokyo Ohka Kogyo Co (TSE:4186) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Tokyo Ohka Kogyo Co Ltd (TSE:4186) » Definitions » ROC %

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Traded in Other Exchanges

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Address

150 Nakamaruko, Nakahara-ku, Kanagawa, Kawasaki, JPN, 211-0012

Website

http://www.tok.co.jp

Tokyo Ohka Kogyo Co Ltd is a Japan-based company that manufactures functional materials and processing equipment. The processing equipment sold by the firm are primarily used in the manufacturing of semiconductors and liquid crystal display products. The materials used in the manufacturing of these products are also sold by the company, particularly for the photolithography process. The firm also sells inorganic and organic chemicals. Tokyo Ohka Kogyo has manufacturing facilities in the United States, Taiwan, China, and South Korea.

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