European Wax Center (European Wax Center) ROC % : 5.06% (As of Mar. 2024)

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What is European Wax Center 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 %. European Wax Center's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 5.06%.

As of today (2024-05-29), European Wax Center's WACC % is 8.13%. European Wax Center's ROC % is 5.12% (calculated using TTM income statement data). European Wax Center earns returns that do not match up to its cost of capital. It will destroy value as it grows.

European Wax Center ROC % Historical Data

The historical data trend for European Wax Center'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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European Wax Center ROC % Chart

European Wax Center Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

2.13

-0.39

4.36

-2.29

4.49

European Wax Center Quarterly Data
	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													2.12	5.58	5.13	4.71	5.06

European Wax Center ROC % Calculation

European Wax Center'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 )
=	44.863 * ( 1 - 33.56% )	/	( (657.549	+	669.671)	/ 2 )
=	29.8069772	/	663.61
=	4.49 %

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	))
=	716.032	-	14.264	-	( 44.219	-	max(0, 32.81	-	86.317	+	44.219	))
=	657.549

	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	))
=	735.726	-	13.32	-	( 52.735	-	max(0, 37.822	-	95.497	+	52.735	))
=	669.671

European Wax Center'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 )
=	44.784 * ( 1 - 24.83% )	/	( (669.671	+	661.981)	/ 2 )
=	33.6641328	/	665.826
=	5.06 %

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	))
=	735.726	-	13.32	-	( 52.735	-	max(0, 37.822	-	95.497	+	52.735	))
=	669.671

	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	))
=	736.861	-	14.525	-	( 60.355	-	max(0, 34.882	-	102.845	+	60.355	))
=	661.981

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

European Wax Center (NAS:EWCZ) 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, European Wax Center's WACC % is 8.13%. European Wax Center's ROC % is 5.12% (calculated using TTM income statement data). European Wax Center 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.

European Wax Center ROC % Related Terms

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European Wax Center (European Wax Center) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » European Wax Center Inc (NAS:EWCZ) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

5830 Granite Parkway, 3rd Floor, Plano, TX, USA, 75024

Website

https://www.waxcenter.com

European Wax Center Inc is a franchisor and operator of OOH waxing services. Its product sales consist of revenue earned from sales of proprietary wax.

Executives

Andrea Lyn Wasserman	officer: Chief Commercial Officer	C/O EUROPEAN WAX CENTER, INC., 5830 GRANITE PARKWAY, 3RD FLOOR, PLANO TX 75024
Stacie Shirley	officer: CFO	TUESDAY MORNING CORPORATION, 6250 LBJ FREEWAY, DALLAS TX 75240
Julie Hauser-blanner	officer: SVP Ops, Field Tr. & Ind. Eng.	C/O EUROPEAN WAX CENTER, INC., 5830 GRANITE PARKWAY, 3RD FLOOR, PLANO TX 75024
Ewc Holdings, Inc.	10 percent owner	15511 FISHER ISLAND DRIVE, FISHER ISLAND FL 37495
General Atlantic Partners Aiv-1 A, L.p.	director, 10 percent owner	55 EAST 52ND STREET, 32ND FLOOR, NEW YORK NY 10055
Gapco Aiv Holdings, L.p.	director, 10 percent owner	C/O GENERAL ATLANTIC SERVICE CO., L.P., 55 EAST 52ND STREET, 33RD FLOOR, NEW YORK NY 10055
Ga Aiv-1 B Interholdco (ew), L.p.	director, 10 percent owner	C/O GENERAL ATLANTIC SERVICE CO., L.P., 55 EAST 52ND STREET, 33RD FLOOR, NEW YORK NY 10055
General Atlantic Genpar (ew), L.p.	director, 10 percent owner	C/O GENERAL ATLANTIC SERVICE CO., L.P., 55 EAST 52ND STREET, 33RD FLOOR, NEW YORK NY 10055
General Atlantic Partners Aiv (ew), L.p.	director, 10 percent owner	C/O GENERAL ATLANTIC SERVICE CO., L.P., 55 EAST 52ND STREET, 33RD FLOOR, NEW YORK NY 10055
Gapco Aiv Interholdco (ew), L.p.	director, 10 percent owner	C/O GENERAL ATLANTIC SERVICE CO., L.P., 55 EAST 52ND STREET, 33RD FLOOR, NEW YORK NY 10055
General Atlantic Partners Aiv-1 B, L.p.	director, 10 percent owner	55 EAST 52ND STREET, 32ND FLOOR, NEW YORK NY 10055
Gap Coinvestments V, Llc	director, 10 percent owner	55 EAST 52ND STREET, 33RD FLOOR, NEW YORK NY 10055
General Atlantic (spv) Gp, Llc	director, 10 percent owner	55 EAST 52ND STREET, 33RD FLOOR, NEW YORK NY 10055
General Atlantic, L.p.	director, 10 percent owner	55 EAST 52ND STREET, 33RD FLOOR, NEW YORK NY 10055
Gap Coinvestments Iii, Llc	director, 10 percent owner	55 EAST 52ND STREET, 33RD FLOOR, NEW YORK NY 10055