Mu Global Holding (Mu Global Holding) ROC % : -31.88% (As of Jan. 2024)

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What is Mu Global Holding 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 %. Mu Global Holding's annualized return on capital (ROC %) for the quarter that ended in Jan. 2024 was -31.88%.

As of today (2024-05-17), Mu Global Holding's WACC % is 4.71%. Mu Global Holding's ROC % is -51.02% (calculated using TTM income statement data). Mu Global Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Mu Global Holding ROC % Historical Data

The historical data trend for Mu Global Holding'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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Mu Global Holding ROC % Chart

Mu Global Holding Annual Data

Trend

Jul18

Jul19

Jul20

Jul21

Jul22

Jul23

ROC %

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-148.67

-88.47

-56.51

-108.68

-54.83

Mu Global Holding Quarterly Data
	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
ROC %	Get a 7-Day Free Trial															-27.14	-29.48	-97.81	-47.34	-31.88

Mu Global Holding ROC % Calculation

Mu Global Holding's annualized Return on Capital (ROC %) for the fiscal year that ended in Jul. 2023 is calculated as:

	ROC % (A: Jul. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jul. 2022 )	+	Invested Capital (A: Jul. 2023 ))	/ count )
=	-0.142 * ( 1 - 0% )	/	( (0.27	+	0.248)	/ 2 )
=	-0.142	/	0.259
=	-54.83 %

where

	Invested Capital		(A: Jul. 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	))
=	0.082	-	0.151	-	( 0.003	-	max(0, 0.415	-	0.076	+	0.003	))
=	0.27

	Invested Capital		(A: Jul. 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	))
=	0.024	-	0.159	-	( 0.004	-	max(0, 0.4	-	0.017	+	0.004	))
=	0.248

Mu Global Holding's annualized Return on Capital (ROC %) for the quarter that ended in Jan. 2024 is calculated as:

	ROC % (Q: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Oct. 2023 )	+	Invested Capital (Q: Jan. 2024 ))	/ count )
=	-0.084 * ( 1 - 0% )	/	( (0.259	+	0.268)	/ 2 )
=	-0.084	/	0.2635
=	-31.88 %

where

	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	))
=	0.015	-	0.149	-	( 0.003	-	max(0, 0.403	-	0.01	+	0.003	))
=	0.259

	Invested Capital		(Q: Jan. 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	))
=	0.01	-	0.146	-	( 0.001	-	max(0, 0.411	-	0.007	+	0.001	))
=	0.268

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

Mu Global Holding (OTCPK:MUGH) 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, Mu Global Holding's WACC % is 4.71%. Mu Global Holding's ROC % is -51.02% (calculated using TTM income statement data). Mu Global Holding 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.

Mu Global Holding ROC % Related Terms

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Mu Global Holding (Mu Global Holding) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Personal Services » Mu Global Holding Ltd (OTCPK:MUGH) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

No. 296, Xinyi Road, 7th Floor, Room No. 5, Section 4, Datong District, Taipei, TWN, 106427

Website

Mu Global Holding Ltd is a beauty and wellness company, providing SPA and wellness service and also Spa related products to the customers. The services provided are designed to improve the overall health system and body function. It operates in the Chinese market with three business models namely Tripartite co-operation and profit-sharing model (deployment of stone spa bed & franchise); Large-scale chain agent model (deployment of stone spa bed); and Direct- service store model. Its products portfolio includes NVB Scent Diffuser and Mini Water Purifier. Its services include Bedrock Bathing/ Hot Stone Bath and Quartz Therapy. The company has geographical segments in Nevada, Seychelles, HongKong and China, where majority of its revenue is eraned from HongKong.

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