Washington H Soul Pattinson (ASX:SOL) ROC % : -1.00% (As of Jan. 2024)

View and export this data going back to 1962. Start your Free Trial

What is Washington H Soul Pattinson 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 %. Washington H Soul Pattinson's annualized return on capital (ROC %) for the quarter that ended in Jan. 2024 was -1.00%.

As of today (2024-05-16), Washington H Soul Pattinson's WACC % is 7.62%. Washington H Soul Pattinson's ROC % is -1.01% (calculated using TTM income statement data). Washington H Soul Pattinson earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Washington H Soul Pattinson ROC % Historical Data

The historical data trend for Washington H Soul Pattinson'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.

* Premium members only.

Washington H Soul Pattinson ROC % Chart

Washington H Soul Pattinson Annual Data

Trend

Jul14

Jul15

Jul16

Jul17

Jul18

Jul19

Jul20

Jul21

Jul22

Jul23

ROC %

Get a 7-Day Free Trial

1.86

-5.65

-0.39

5.96

-0.99

Washington H Soul Pattinson Semi-Annual Data
	Jul14	Jan15	Jul15	Jan16	Jul16	Jan17	Jul17	Jan18	Jul18	Jan19	Jul19	Jan20	Jul20	Jan21	Jul21	Jan22	Jul22	Jan23	Jul23	Jan24
ROC %	Get a 7-Day Free Trial															15.23	10.40	-0.99	-1.04	-1.00

Washington H Soul Pattinson ROC % Calculation

Washington H Soul Pattinson's annualized Return on Capital (ROC %) for the fiscal year that ended in Jul. 2023 is calculated as:

	ROC % (A: Jul. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jul. 2022 )	+	Invested Capital (A: Jul. 2023 ))	/ count )
=	-86.905 * ( 1 - 2.45% )	/	( (8804.556	+	8400.176)	/ 2 )
=	-84.7758275	/	8602.366
=	-0.99 %

where

	Invested Capital		(A: Jul. 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	))
=	9888.333	-	69.636	-	( 1079.314	-	max(0, 402.32	-	1416.461	+	1079.314	))
=	8804.556

	Invested Capital		(A: Jul. 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	))
=	9797.187	-	68.052	-	( 1328.959	-	max(0, 375.241	-	1717.298	+	1328.959	))
=	8400.176

Washington H Soul Pattinson's annualized Return on Capital (ROC %) for the quarter that ended in Jan. 2024 is calculated as:

	ROC % (Q: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jul. 2023 )	+	Invested Capital (Q: Jan. 2024 ))	/ count )
=	-79.244 * ( 1 - -13.6% )	/	( (8400.176	+	9653.45)	/ 2 )
=	-90.021184	/	9026.813
=	-1.00 %

where

	Invested Capital		(Q: Jul. 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	))
=	9797.187	-	68.052	-	( 1328.959	-	max(0, 375.241	-	1717.298	+	1328.959	))
=	8400.176

	Invested Capital		(Q: Jan. 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	))
=	10236.918	-	113.096	-	( 470.372	-	max(0, 296.36	-	1233.756	+	470.372	))
=	9653.45

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

Washington H Soul Pattinson (ASX:SOL) 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, Washington H Soul Pattinson's WACC % is 7.62%. Washington H Soul Pattinson's ROC % is -1.01% (calculated using TTM income statement data). Washington H Soul Pattinson 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.

Washington H Soul Pattinson ROC % Related Terms

Thank you for viewing the detailed overview of Washington H Soul Pattinson's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Washington H Soul Pattinson (ASX:SOL) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Capital Markets » Washington H Soul Pattinson & Co Ltd (ASX:SOL) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

WD3:Germany

Address

151 Clarence Street, Level 14, Sydney, NSW, AUS, 2000

Website

https://www.whsp.com.au

Washington H. Soul Pattinson, or Soul Patts, is a value-oriented investment house which invests in both public and private markets. As an investor, Soul Patts allocates capital with a view to taking a long-term position in its investments and on a passive basis. Long-term holdings in the group's three largest investments—TPG Telecom, Brickworks and New Hope Corporation—contribute more than half of the group's circa AUD 11 billion investment net asset value. A cross-shareholding between Soul Patts and Brickworks was established in the 1960s.