Pebble Beach Systems Group (LSE:PEB) ROC % : 28.06% (As of Dec. 2023)

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What is Pebble Beach Systems 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 %. Pebble Beach Systems Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 28.06%.

As of today (2024-06-02), Pebble Beach Systems Group's WACC % is 8.99%. Pebble Beach Systems Group's ROC % is 18.25% (calculated using TTM income statement data). Pebble Beach Systems Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Pebble Beach Systems Group ROC % Historical Data

The historical data trend for Pebble Beach Systems 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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Pebble Beach Systems Group ROC % Chart

Pebble Beach Systems Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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17.22

14.97

15.38

12.92

16.04

Pebble Beach Systems 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															12.87	7.86	24.35	10.80	28.06

Pebble Beach Systems Group ROC % Calculation

Pebble Beach Systems 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 )
=	2.075 * ( 1 - 0.65% )	/	( (12.568	+	13.141)	/ 2 )
=	2.0615125	/	12.8545
=	16.04 %

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	))
=	11.675	-	1.095	-	( 0.728	-	max(0, 6.747	-	4.759	+	0.728	))
=	12.568

	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	))
=	12.971	-	1.629	-	( 0.796	-	max(0, 7.216	-	5.417	+	0.796	))
=	13.141

Pebble Beach Systems 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 )
=	3.002 * ( 1 - 0.31% )	/	( (8.186	+	13.141)	/ 2 )
=	2.9926938	/	10.6635
=	28.06 %

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	))
=	11.895	-	6.039	-	( 0.951	-	max(0, 7.102	-	4.772	+	0.951	))
=	8.186

	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	))
=	12.971	-	1.629	-	( 0.796	-	max(0, 7.216	-	5.417	+	0.796	))
=	13.141

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

Pebble Beach Systems Group (LSE:PEB) 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, Pebble Beach Systems Group's WACC % is 8.99%. Pebble Beach Systems Group's ROC % is 18.25% (calculated using TTM income statement data). Pebble Beach Systems Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

Pebble Beach Systems Group ROC % Related Terms

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Pebble Beach Systems Group (LSE:PEB) Business Description

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VSF:Germany

Address

Blenheim Road, Unit 1, First Quarter, Epsom, Surrey, GBR, KT19 9QN

Website

https://www.pebbleplc.com

Pebble Beach Systems Group PLC is a world leader in designing and delivering automation, integrated channel, and virtualized playout software solutions, with scalable products designed for applications of all sizes. Its customers include TV Globo Brazil, Fox News, Business Channels USA, ZDF Germany, etc. It has Pebble beach systems and Central segments. It derives most of its revenue from the Pebble beach systems segment. The company operates in the UK, Europe, North and Latin America, the Middle East, Africa, and the Asia Pacific.