ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Wharf Real Estate Investment Co's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 3.38%.
As of today (2024-04-28), Wharf Real Estate Investment Co's WACC % is 7.62%. Wharf Real Estate Investment Co's ROIC % is 3.15% (calculated using TTM income statement data).
Wharf Real Estate Investment Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Wharf Real Estate Investment Co ROIC % Historical Data
* 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.
Competitive Comparison of Wharf Real Estate Investment Co's ROIC %
For the Real Estate Services subindustry, Wharf Real Estate Investment Co'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.
Wharf Real Estate Investment Co's ROIC % Distribution in the Real Estate Industry
For the Real Estate industry and Real Estate sector, Wharf Real Estate Investment Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Wharf Real Estate Investment Co's ROIC % falls into.
Wharf Real Estate Investment Co ROIC % Calculation
Wharf Real Estate Investment Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:
Note:
The Operating Income data used here is two times the semi-annual (Dec. 2023) data.
* 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.
Wharf Real Estate Investment Co (HKSE:01997) 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, Wharf Real Estate Investment Co's WACC % is 7.62%. Wharf Real Estate Investment Co's ROIC % is 3.15% (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.
Wharf Real Estate Investment Co ROIC % Related Terms
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Wharf Real Estate Investment Co (HKSE:01997) Business Description
Wharf spun off Wharf Real Estate Investment Co in November 2017. It is a leading property investor with a focus in prime retail assets in Hong Kong. Rental income from two flagship assets Harbour City and Times Square account for around 80% of revenue. The balance is made up of The Murray hotel, a suburban mall in Plaza Hollywood, two offices in Central CBD. The group also holds two malls in Singapore and a mixed-development in Suzhou. Wharf was originally a shipping company but transformed into a property developer and investor in the 1960s by redeveloping its unused industrial assets, many located in city-center and waterfront locations. The Harbour City site was previously wharfs, and the Times Square site was a tram depot in the 1970s. Wheelock holds a 45% stake in WREIC.
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