Candy Club Holdings (ASX:CLB) ROIC % : -38.81% (As of Jun. 2023)

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What is Candy Club Holdings ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Candy Club Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2023 was -38.81%.

As of today (2024-05-30), Candy Club Holdings's WACC % is 1.46%. Candy Club Holdings's ROIC % is -33.59% (calculated using TTM income statement data). Candy Club Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Candy Club Holdings ROIC % Historical Data

The historical data trend for Candy Club Holdings's ROIC % 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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Candy Club Holdings ROIC % Chart

Candy Club Holdings Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

-223.04

-157.87

-121.35

-13.93

-33.45

Candy Club Holdings Semi-Annual Data
	Jun18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROIC %	Get a 7-Day Free Trial						-106.26	-68.31	94.55	-38.81	50.60

Competitive Comparison of Candy Club Holdings's ROIC %

For the Confectioners subindustry, Candy Club Holdings's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Candy Club Holdings's ROIC % Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, Candy Club Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Candy Club Holdings's ROIC % falls into.

Candy Club Holdings ROIC % Calculation

Candy Club Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROIC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	-0.871 * ( 1 - 0% )	/	( (11.161	+	1.34)	/ 2 )
=	-0.871	/	6.2505
=	-13.93 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	21.339	-	3	-	( 7.178	-	max(0, 6.663	-	19.917	+	7.178	))
=	11.161

	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	))
=	0.218	-	0.196	-	( 0.183	-	max(0, 1.536	-	0.218	+	0.183	))
=	1.34

Candy Club Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2023 is calculated as:

	ROIC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2022 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	-0.52 * ( 1 - 0% )	/	( (1.34	+	0)	/ 2 )
=	-0.52	/	0.67
=	-77.61 %

where

	Invested Capital		(Q: 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	))
=	0.218	-	0.196	-	( 0.183	-	max(0, 1.536	-	0.218	+	0.183	))
=	1.34

	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	))
=	0.018	-	0.098	-	( 0.007	-	max(0, 0.098	-	0.018	+	0.007	))
=	0

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

Candy Club Holdings (ASX:CLB) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Candy Club Holdings's WACC % is 1.46%. Candy Club Holdings's ROIC % is -33.59% (calculated using TTM income statement data).

Be Aware

Like ROE % and ROA %, ROIC % 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.

Candy Club Holdings ROIC % Related Terms

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Candy Club Holdings (ASX:CLB) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Candy Club Holdings Ltd (ASX:CLB) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

350 Kent Street, Level 2, Sydney, NSW, AUS, 90230

Website

https://www.candyclub.com

Candy Club Holdings Ltd is engaged in two components namely the B2C business and B2B business. Under the B2C business, the company sells subscriptions plans for the Candy Boxes in the USA, and the B2B business involves the selling of Candy Club Branded Confectionery to specialty market resellers in the USA. It has one segment, which is administration services in Australia.