Rite Zone Chemcon India (NSE:RITEZONE) ROC % : 6.85% (As of Sep. 2023)

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What is Rite Zone Chemcon India 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 %. Rite Zone Chemcon India's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was 6.85%.

As of today (2024-06-10), Rite Zone Chemcon India's WACC % is 12.84%. Rite Zone Chemcon India's ROC % is 13.35% (calculated using TTM income statement data). Rite Zone Chemcon India 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.

Rite Zone Chemcon India ROC % Historical Data

The historical data trend for Rite Zone Chemcon India'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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Rite Zone Chemcon India ROC % Chart

Rite Zone Chemcon India Annual Data

Trend

Mar20

Mar21

Mar22

Mar23

ROC %

13.61

1.68

-0.89

12.18

Rite Zone Chemcon India Semi-Annual Data
	Mar20	Mar21	Mar22	Sep22	Mar23	Sep23
ROC %	Get a 7-Day Free Trial			-	-	5.94	21.43	6.85

Rite Zone Chemcon India ROC % Calculation

Rite Zone Chemcon India's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	14.123 * ( 1 - 23.79% )	/	( (66.893	+	109.846)	/ 2 )
=	10.7631383	/	88.3695
=	12.18 %

where

	Invested Capital		(A: Mar. 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	))
=	112.366	-	41.775	-	( 3.698	-	max(0, 52.378	-	91.423	+	3.698	))
=	66.893

	Invested Capital		(A: Mar. 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	))
=	191.933	-	46.355	-	( 35.732	-	max(0, 53.137	-	172.05	+	35.732	))
=	109.846

Rite Zone Chemcon India's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	11.41 * ( 1 - 32.04% )	/	( (109.846	+	116.551)	/ 2 )
=	7.754236	/	113.1985
=	6.85 %

where

	Invested Capital		(Q: Mar. 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	))
=	191.933	-	46.355	-	( 35.732	-	max(0, 53.137	-	172.05	+	35.732	))
=	109.846

	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	))
=	185.294	-	39.176	-	( 29.567	-	max(0, 43.026	-	165.388	+	29.567	))
=	116.551

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

Rite Zone Chemcon India (NSE:RITEZONE) 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, Rite Zone Chemcon India's WACC % is 12.84%. Rite Zone Chemcon India's ROC % is 13.35% (calculated using TTM income statement data). Rite Zone Chemcon India 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.

Rite Zone Chemcon India ROC % Related Terms

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Rite Zone Chemcon India (NSE:RITEZONE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Chemicals » Rite Zone Chemcon India Ltd (NSE:RITEZONE) » Definitions » ROC %

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Traded in Other Exchanges

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Address

Row House 11, Beverly Park, Row House co-operative housing society Ltd, Mira Road, Thane, MH, IND, 401107

Website

http://www.ritezone.in

Rite Zone Chemcon India Ltd deals in a range of construction chemicals and concrete products. The company offers complete construction solutions by supplying a complete range of various chemical products related to civil construction, infrastructure, building and structure including pre-construction or post construction as well as supplying all types of concrete required for construction and infrastructure developments.

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