Grand Baoxin Auto Group (HKSE:01293) ROC % : -3.80% (As of Dec. 2023)

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What is Grand Baoxin Auto Group 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 %. Grand Baoxin Auto Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -3.80%.

As of today (2024-05-23), Grand Baoxin Auto Group's WACC % is 2.58%. Grand Baoxin Auto Group's ROC % is -0.83% (calculated using TTM income statement data). Grand Baoxin Auto Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Grand Baoxin Auto Group ROC % Historical Data

The historical data trend for Grand Baoxin Auto Group'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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Grand Baoxin Auto Group ROC % Chart

Grand Baoxin Auto Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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2.43

0.11

1.11

-6.00

-0.80

Grand Baoxin Auto Group Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															0.67	2.92	-13.68	0.71	-3.80

Grand Baoxin Auto Group ROC % Calculation

Grand Baoxin Auto Group'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 )
=	-391.215 * ( 1 - 50.2% )	/	( (25705.886	+	22790.161)	/ 2 )
=	-194.82507	/	24248.0235
=	-0.80 %

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	))
=	28118.179	-	1746.301	-	( 665.992	-	max(0, 15192.799	-	18565.983	+	665.992	))
=	25705.886

	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	))
=	25258.55	-	2113.698	-	( 354.691	-	max(0, 12513.902	-	16519.944	+	354.691	))
=	22790.161

Grand Baoxin Auto Group'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 )
=	-1037.486 * ( 1 - 17.95% )	/	( (21980.233	+	22790.161)	/ 2 )
=	-851.257263	/	22385.197
=	-3.80 %

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	))
=	25015.035	-	2449.815	-	( 584.987	-	max(0, 12405.23	-	15906.425	+	584.987	))
=	21980.233

	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	))
=	25258.55	-	2113.698	-	( 354.691	-	max(0, 12513.902	-	16519.944	+	354.691	))
=	22790.161

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

Grand Baoxin Auto Group (HKSE:01293) 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, Grand Baoxin Auto Group's WACC % is 2.58%. Grand Baoxin Auto Group's ROC % is -0.83% (calculated using TTM income statement data). Grand Baoxin Auto Group 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.

Grand Baoxin Auto Group ROC % Related Terms

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Grand Baoxin Auto Group (HKSE:01293) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Grand Baoxin Auto Group Ltd (HKSE:01293) » Definitions » ROC %

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GBXXY:USA

Address

No. 3998 Hongxin Road, Grand Baoxin Building, Minhang District, Shanghai, CHN

Website

http://www.klbaoxin.com

Grand Baoxin Auto Group Ltd is an automobile sales and service group which focuses on mid-and-high end brands as well as luxury and ultra-luxury brands. It has only one reportable segment being the Sale of Motor Vehicles and the Provision of Related Services. The company offers a full range of integrated services, providing a range of services including new car sales, after-sales maintenance, auto beauty modification, used car sales, auto insurance business, auto parts sales, and other automotive-related product sales. The company's car brand portfolio comprises of Audi, Jaguar Land Rover, Volvo, Cadillac, Chrysler, Alfa Romeo, Porsche, Rolls Royce, and others. The company operates in Mainland China.

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