Top Glove Bhd (Top Glove Bhd) ROC % : -3.54% (As of Feb. 2024)

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What is Top Glove Bhd 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 %. Top Glove Bhd's annualized return on capital (ROC %) for the quarter that ended in Feb. 2024 was -3.54%.

As of today (2024-04-28), Top Glove Bhd's WACC % is 12.84%. Top Glove Bhd's ROC % is -5.54% (calculated using TTM income statement data). Top Glove Bhd earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Top Glove Bhd ROC % Historical Data

The historical data trend for Top Glove Bhd'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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Top Glove Bhd ROC % Chart

Top Glove Bhd Annual Data

Trend

Aug14

Aug15

Aug16

Aug17

Aug18

Aug19

Aug20

Aug21

Aug22

Aug23

ROC %

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8.45

32.40

121.41

3.25

-7.88

Top Glove Bhd Quarterly Data
	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
ROC %	Get a 7-Day Free Trial															-10.14	-5.84	-8.44	-3.28	-3.54

Top Glove Bhd ROC % Calculation

Top Glove Bhd's annualized Return on Capital (ROC %) for the fiscal year that ended in Aug. 2023 is calculated as:

	ROC % (A: Aug. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Aug. 2022 )	+	Invested Capital (A: Aug. 2023 ))	/ count )
=	-115.562 * ( 1 - 1.65% )	/	( (1559.101	+	1324.706)	/ 2 )
=	-113.655227	/	1441.9035
=	-7.88 %

where

	Invested Capital		(A: Aug. 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	))
=	1818.178	-	71.519	-	( 187.558	-	max(0, 223.218	-	472.899	+	187.558	))
=	1559.101

	Invested Capital		(A: Aug. 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	))
=	1532.16	-	41.654	-	( 204.566	-	max(0, 200.453	-	366.253	+	204.566	))
=	1324.706

Top Glove Bhd's annualized Return on Capital (ROC %) for the quarter that ended in Feb. 2024 is calculated as:

	ROC % (Q: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Nov. 2023 )	+	Invested Capital (Q: Feb. 2024 ))	/ count )
=	-47.388 * ( 1 - 6.82% )	/	( (1269.732	+	1224.78)	/ 2 )
=	-44.1561384	/	1247.256
=	-3.54 %

where

	Invested Capital		(Q: Nov. 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	))
=	1497.992	-	64.488	-	( 213.617	-	max(0, 201.294	-	365.066	+	213.617	))
=	1269.732

	Invested Capital		(Q: Feb. 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	))
=	1468.052	-	71.871	-	( 196.306	-	max(0, 206.67	-	378.071	+	196.306	))
=	1224.78

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

Top Glove Bhd (OTCPK:TPGVF) 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, Top Glove Bhd's WACC % is 12.84%. Top Glove Bhd's ROC % is -5.54% (calculated using TTM income statement data). Top Glove Bhd 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.

Top Glove Bhd ROC % Related Terms

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Top Glove Bhd (Top Glove Bhd) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » Top Glove Corp Bhd (OTCPK:TPGVF) » Definitions » ROC %

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TGLVY:USA BVA:Singapore 7113:Malaysia

Address

16, Persiaran Setia Dagang, Top Glove Tower, Level 21, Setia Alam, Seksyen U13, Shah Alam, SGR, MYS, 40170

Website

https://www.topglove.com

Top Glove Corp Bhd manufactures and sells gloves through several product lines to a diverse group of world-wide customers. Some of the different glove options include latex, nitrile, vinyl, PE, Polychloroprene, Polyisoprene, Flexylon, HDPE and surgical. Top Glove's products are utilized in an array of end markets such as aerospace, food, Personal care, medical care, oral care and home care. Traditionally, the company has derived over half of its sales from its nitrile and powdered latex product lines, with customers in North America and Europe generating the majority demand.

Top Glove Bhd (Top Glove Bhd) Headlines

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