Afric Industries (CAS:AFI) ROC % : 12.65% (As of Dec. 2023)

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What is Afric Industries 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 %. Afric Industries's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 12.65%.

As of today (2024-06-05), Afric Industries's WACC % is 10.26%. Afric Industries's ROC % is 10.21% (calculated using TTM income statement data). Afric Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Afric Industries ROC % Historical Data

The historical data trend for Afric Industries'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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Afric Industries ROC % Chart

Afric Industries Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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15.73

16.02

19.05

13.75

10.04

Afric Industries Semi-Annual Data
	Jun14	Jun15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial													12.44	21.00	7.26	8.30	12.65

Afric Industries ROC % Calculation

Afric Industries'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 )
=	6.224 * ( 1 - 29.24% )	/	( (49.811	+	37.926)	/ 2 )
=	4.4041024	/	43.8685
=	10.04 %

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	))
=	58.833	-	7.816	-	( 1.206	-	max(0, 13.51	-	37.1	+	1.206	))
=	49.811

	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	))
=	52.085	-	7.462	-	( 6.697	-	max(0, 8.135	-	30.283	+	6.697	))
=	37.926

Afric Industries's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	7.216 * ( 1 - 30.27% )	/	( (41.6	+	37.926)	/ 2 )
=	5.0317168	/	39.763
=	12.65 %

where

	Invested Capital		(Q: Jun. 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	))
=	55.612	-	12.889	-	( 1.123	-	max(0, 14.421	-	33.967	+	1.123	))
=	41.6

	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	))
=	52.085	-	7.462	-	( 6.697	-	max(0, 8.135	-	30.283	+	6.697	))
=	37.926

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Afric Industries (CAS:AFI) 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, Afric Industries's WACC % is 10.26%. Afric Industries's ROC % is 10.21% (calculated using TTM income statement data). Afric Industries 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.

Afric Industries ROC % Related Terms

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Afric Industries (CAS:AFI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Furnishings, Fixtures & Appliances » Afric Industries SA (CAS:AFI) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Route de Tetouan, Lot 107, Zone Industrielle, Tangier, MAR, BP 368

Website

http://www.africindustries.com

Afric Industries SA is engaged in the development, production and marketing of abrasive products of all shapes and contents. It is also engaged in the manufacturing and sale of tapes and adhesive and self-adhesive tapes; manufacturing, assembling, glazing, installation and marketing of all types of joinery and finished aluminum products and other materials; purchase, sale, import, export, manufacturing, processing, assembly, installation laying of all equipments, materials, tools, accessories, raw materials and spare parts.

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