On The Beach Group (LSE:OTB) ROC % : 1.79% (As of Mar. 2024)

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What is On The Beach 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 %. On The Beach Group's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 1.79%.

As of today (2024-06-01), On The Beach Group's WACC % is 19.92%. On The Beach Group's ROC % is 8.74% (calculated using TTM income statement data). On The Beach Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

On The Beach Group ROC % Historical Data

The historical data trend for On The Beach 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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On The Beach Group ROC % Chart

On The Beach Group Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

ROC %

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15.36

-25.61

-23.22

2.74

9.25

On The Beach Group Semi-Annual Data
	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23	Mar24
ROC %	Get a 7-Day Free Trial															-7.57	11.23	-4.85	18.49	1.79

On The Beach Group ROC % Calculation

On The Beach Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2023 is calculated as:

	ROC % (A: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2022 )	+	Invested Capital (A: Sep. 2023 ))	/ count )
=	13.8 * ( 1 - 17.83% )	/	( (123.9	+	121.3)	/ 2 )
=	11.33946	/	122.6
=	9.25 %

where

	Invested Capital		(A: Sep. 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	))
=	346.9	-	158.5	-	( 64.5	-	max(0, 187.1	-	259.5	+	64.5	))
=	123.9

	Invested Capital		(A: Sep. 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	))
=	435.2	-	238.1	-	( 75.8	-	max(0, 264.4	-	350.6	+	75.8	))
=	121.3

On The Beach Group'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: Sep. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	4 * ( 1 - 16.67% )	/	( (121.3	+	251.8)	/ 2 )
=	3.3332	/	186.55
=	1.79 %

where

	Invested Capital		(Q: Sep. 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	))
=	435.2	-	238.1	-	( 75.8	-	max(0, 264.4	-	350.6	+	75.8	))
=	121.3

	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	))
=	621	-	361.5	-	( 7.7	-	max(0, 449.4	-	538.1	+	7.7	))
=	251.8

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

On The Beach Group (LSE:OTB) 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, On The Beach Group's WACC % is 19.92%. On The Beach Group's ROC % is 8.74% (calculated using TTM income statement data). On The Beach 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.

On The Beach Group ROC % Related Terms

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On The Beach Group (LSE:OTB) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » On The Beach Group PLC (LSE:OTB) » Definitions » ROC %

Comparable Companies

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OTBl:UK 9BP:Germany

Address

5 Adair Street, Manchester, GBR, M1 2NQ

Website

https://www.onthebeachgroupplc.com

On The Beach Group PLC is one of the UK's online retailers of beach holiday packages. It facilitates the customers to reach out to the suppliers of accommodation and airline tickets through its websites and telephone. The group organizes its operations into four principal financial reporting segments: OTB(onthebeach.co.uk and sunshine.co.uk), International(ebeach.se, ebeach.no & ebeach.dk), Classic Collection Holidays, and Classic Package Holidays. Its International segment comprises websites in Sweden, Norway, and Denmark.

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