SG Group Holdings (HKSE:01657) ROC % : -20.34% (As of Oct. 2023)

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What is SG Group Holdings 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 %. SG Group Holdings's annualized return on capital (ROC %) for the quarter that ended in Oct. 2023 was -20.34%.

As of today (2024-06-03), SG Group Holdings's WACC % is 5.61%. SG Group Holdings's ROC % is -19.50% (calculated using TTM income statement data). SG Group Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

SG Group Holdings ROC % Historical Data

The historical data trend for SG Group Holdings'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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SG Group Holdings ROC % Chart

SG Group Holdings Annual Data

Trend

Apr15

Apr16

Apr17

Apr18

Apr19

Apr20

Apr21

Apr22

Apr23

ROC %

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37.09

22.13

0.22

0.67

-15.82

SG Group Holdings Semi-Annual Data
	Apr15	Apr16	Oct16	Apr17	Oct17	Apr18	Oct18	Apr19	Oct19	Apr20	Oct20	Apr21	Oct21	Apr22	Oct22	Apr23	Oct23
ROC %	Get a 7-Day Free Trial												-0.18	5.05	-10.82	-19.95	-20.34

SG Group Holdings ROC % Calculation

SG Group Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Apr. 2023 is calculated as:

	ROC % (A: Apr. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Apr. 2022 )	+	Invested Capital (A: Apr. 2023 ))	/ count )
=	-11.804 * ( 1 - 0.54% )	/	( (78.179	+	70.259)	/ 2 )
=	-11.7402584	/	74.219
=	-15.82 %

where

	Invested Capital		(A: Apr. 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	))
=	150.956	-	14.15	-	( 58.627	-	max(0, 22.462	-	112.92	+	58.627	))
=	78.179

	Invested Capital		(A: Apr. 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	))
=	132.623	-	17.081	-	( 45.283	-	max(0, 25.017	-	108.861	+	45.283	))
=	70.259

SG Group Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Oct. 2023 is calculated as:

	ROC % (Q: Oct. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Apr. 2023 )	+	Invested Capital (Q: Oct. 2023 ))	/ count )
=	-16.758 * ( 1 - 0.97% )	/	( (70.259	+	92.921)	/ 2 )
=	-16.5954474	/	81.59
=	-20.34 %

where

	Invested Capital		(Q: Apr. 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	))
=	132.623	-	17.081	-	( 45.283	-	max(0, 25.017	-	108.861	+	45.283	))
=	70.259

	Invested Capital		(Q: Oct. 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	))
=	113.611	-	6.249	-	( 14.441	-	max(0, 14.807	-	84.188	+	14.441	))
=	92.921

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

SG Group Holdings (HKSE:01657) 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, SG Group Holdings's WACC % is 5.61%. SG Group Holdings's ROC % is -19.50% (calculated using TTM income statement data). SG Group Holdings 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.

SG Group Holdings ROC % Related Terms

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SG Group Holdings (HKSE:01657) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » SG Group Holdings Ltd (HKSE:01657) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

1-7 Wah Sing Street, Unit B, 9th Floor, Mai Wah Industrial Building, Kwai Chung, New Territories, Hong Kong, HKG

Website

http://www.jcfash.com

SG Group Holdings Ltd is an investment holding company. The company's operating segment includes Supply of Apparel Products and Consultation Services. The company generates maximum revenue from the Supply of Apparel Products segment which is engaged in the supply of apparel products with designing and sourcing services to fashion retailers. The company earns revenue from Womenswear, Childrenswear, and Menswear products. Geographically, it derives a majority of its revenue from the United Kingdom and also has a presence in the PRC, Germany, the United States of America, Hong Kong, Ireland, the Middle East, and Other Countries.

Executives

Choi King Ting Charles	2101 Beneficial owner
Jc Fashion International Group Limited	2101 Beneficial owner

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