U-Best Innovative Technology Co (ROCO:4714) ROC % : -2.87% (As of Mar. 2024)

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What is U-Best Innovative Technology Co 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 %. U-Best Innovative Technology Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -2.87%.

As of today (2024-06-09), U-Best Innovative Technology Co's WACC % is 7.88%. U-Best Innovative Technology Co's ROC % is -2.68% (calculated using TTM income statement data). U-Best Innovative Technology Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

U-Best Innovative Technology Co ROC % Historical Data

The historical data trend for U-Best Innovative Technology Co'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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U-Best Innovative Technology Co ROC % Chart

U-Best Innovative Technology Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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1.25

-0.65

-0.85

-1.01

-2.01

U-Best Innovative Technology Co Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															-0.26	-2.47	-2.26	-3.07	-2.87

U-Best Innovative Technology Co ROC % Calculation

U-Best Innovative Technology Co'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 )
=	-98.589 * ( 1 - 3.98% )	/	( (4503.037	+	4933.542)	/ 2 )
=	-94.6651578	/	4718.2895
=	-2.01 %

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	))
=	5985.938	-	143.72	-	( 1339.181	-	max(0, 1882.586	-	3471.647	+	1339.181	))
=	4503.037

	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	))
=	6310.815	-	144.161	-	( 1233.112	-	max(0, 2217.418	-	3686.582	+	1233.112	))
=	4933.542

U-Best Innovative Technology Co'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: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-144.588 * ( 1 - -0.04% )	/	( (4933.542	+	5156.256)	/ 2 )
=	-144.6458352	/	5044.899
=	-2.87 %

where

	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	))
=	6310.815	-	144.161	-	( 1233.112	-	max(0, 2217.418	-	3686.582	+	1233.112	))
=	4933.542

	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	))
=	7167.046	-	169.866	-	( 1840.924	-	max(0, 1775.459	-	4384.813	+	1840.924	))
=	5156.256

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

U-Best Innovative Technology Co (ROCO:4714) 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, U-Best Innovative Technology Co's WACC % is 7.88%. U-Best Innovative Technology Co's ROC % is -2.68% (calculated using TTM income statement data). U-Best Innovative Technology Co 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.

U-Best Innovative Technology Co ROC % Related Terms

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U-Best Innovative Technology Co (ROCO:4714) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Chemicals » U-Best Innovative Technology Co Ltd (ROCO:4714) » Definitions » ROC %

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Address

Number 258-26, Anding,, Anjia Village,, Anding District,, Tainan, TWN

Website

https://www.u-best-inno.com

U-Best Innovative Technology Co Ltd is a Taiwan-based company engaged in manufacturing and trading polymer chemical raw materials and synthetic leather, plastic leather, and flocked fabric; development, leasing, and sale of residential and office buildings; breeding of livestock; and trading of commodities. The products of the company's polymer chemical raw materials include polyurethane resins, adhesives, surface treatment agents, and solvents.

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