TMC Life Sciences Bhd (XKLS:0101) ROC % : 4.65% (As of Mar. 2024)

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What is TMC Life Sciences Bhd 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 %. TMC Life Sciences Bhd's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 4.65%.

As of today (2024-06-10), TMC Life Sciences Bhd's WACC % is 6.36%. TMC Life Sciences Bhd's ROC % is 5.68% (calculated using TTM income statement data). TMC Life Sciences Bhd earns returns that do not match up to its cost of capital. It will destroy value as it grows.

TMC Life Sciences Bhd ROC % Historical Data

The historical data trend for TMC Life Sciences Bhd'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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TMC Life Sciences Bhd ROC % Chart

TMC Life Sciences Bhd Annual Data

Trend

May13

May14

May15

May16

Aug17

Aug18

Aug19

Jun21

Jun22

Jun23

ROC %

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3.76

2.76

2.40

4.20

4.30

TMC Life Sciences Bhd Quarterly Data
	Feb19	May19	Aug19	Nov19	Feb20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															6.86	4.36	6.78	6.56	4.65

TMC Life Sciences Bhd ROC % Calculation

TMC Life Sciences Bhd's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	42.954 * ( 1 - 3.99% )	/	( (954.295	+	964.813)	/ 2 )
=	41.2401354	/	959.554
=	4.30 %

where

	Invested Capital		(A: Jun. 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	))
=	1132.85	-	64.291	-	( 138.864	-	max(0, 90.282	-	204.546	+	138.864	))
=	954.295

	Invested Capital		(A: 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	))
=	1176.795	-	58.752	-	( 162.38	-	max(0, 98.57	-	251.8	+	162.38	))
=	964.813

TMC Life Sciences Bhd'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 )
=	54.66 * ( 1 - 20.04% )	/	( (936.184	+	944.139)	/ 2 )
=	43.706136	/	940.1615
=	4.65 %

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	))
=	1191.303	-	79.207	-	( 190.337	-	max(0, 96.978	-	272.89	+	190.337	))
=	936.184

	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	))
=	1195.919	-	75.65	-	( 192.481	-	max(0, 97.452	-	273.582	+	192.481	))
=	944.139

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

TMC Life Sciences Bhd (XKLS:0101) 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, TMC Life Sciences Bhd's WACC % is 6.36%. TMC Life Sciences Bhd's ROC % is 5.68% (calculated using TTM income statement data). TMC Life Sciences Bhd 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.

TMC Life Sciences Bhd ROC % Related Terms

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TMC Life Sciences Bhd (XKLS:0101) Business Description

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GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » TMC Life Sciences Bhd (XKLS:0101) » Definitions » ROC %

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Address

No. 11, PJU 5, Jalan Teknologi, Level 11, Taman Sains, Kota Damansara, Petaling Jaya, SGR, MYS, 47810

Website

https://www.tmclife.com

TMC Life Sciences Bhd is an investment holding company operating a multi-disciplinary tertiary care center and fertility center in Malaysia. It operates Tropicana Medical Centre, Kota Damansara (TMCKD), a medical center located in Petaling Jaya. Its TMCKD provides healthcare services in various medical/surgical specialties and subspecialties, including anesthesiology, cancer, cardiology, colorectal, dermatology, ENT, fertility, gastroenterology, as well as offers internal medicines and respiratory medicines. Its fertility center provides a range of fertility treatments for couples. The company also operates a women's clinic; provides fertility consultancy, laboratory, and embryology services; and offers pharmacy services and products.

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