E-Home Household Service Holdings (E-Home Household Service Holdings) ROIC % : -102.85% (As of Jun. 2023)

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What is E-Home Household Service 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 %. E-Home Household Service Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2023 was -102.85%.

As of today (2024-05-05), E-Home Household Service Holdings's WACC % is 12.41%. E-Home Household Service Holdings's ROIC % is -67.16% (calculated using TTM income statement data). E-Home Household Service Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

E-Home Household Service Holdings ROIC % Historical Data

The historical data trend for E-Home Household Service 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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E-Home Household Service Holdings ROIC % Chart

E-Home Household Service Holdings Annual Data

Trend

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROIC %

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98.40

43.00

36.57

-7.28

-62.07

E-Home Household Service Holdings Semi-Annual Data
	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23
ROIC %	Get a 7-Day Free Trial								-45.18	-7.07	-20.85	-3.84	-102.85

Competitive Comparison of E-Home Household Service Holdings's ROIC %

For the Personal Services subindustry, E-Home Household Service 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.

E-Home Household Service Holdings's ROIC % Distribution in the Personal Services Industry

For the Personal Services industry and Consumer Cyclical sector, E-Home Household Service Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where E-Home Household Service Holdings's ROIC % falls into.

E-Home Household Service Holdings ROIC % Calculation

E-Home Household Service Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROIC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	-30.365 * ( 1 - -0.8% )	/	( (20.546	+	78.079)	/ 2 )
=	-30.60792	/	49.3125
=	-62.07 %

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	))
=	80.492	-	5.104	-	( 54.842	-	max(0, 8.193	-	66.996	+	54.842	))
=	20.546

	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	))
=	158.256	-	8.983	-	( 71.252	-	max(0, 12.837	-	84.031	+	71.252	))
=	78.079

E-Home Household Service 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 )
=	-59.692 * ( 1 - -0.07% )	/	( (38.079	+	78.079)	/ 2 )
=	-59.7337844	/	58.079
=	-102.85 %

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	))
=	110.299	-	9.75	-	( 62.47	-	max(0, 13.701	-	76.301	+	62.47	))
=	38.079

	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	))
=	158.256	-	8.983	-	( 71.252	-	max(0, 12.837	-	84.031	+	71.252	))
=	78.079

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

E-Home Household Service Holdings (NAS:EJH) 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, E-Home Household Service Holdings's WACC % is 12.41%. E-Home Household Service Holdings's ROIC % is -67.16% (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.

E-Home Household Service Holdings ROIC % Related Terms

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E-Home Household Service Holdings (E-Home Household Service Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Personal Services » E-Home Household Service Holdings Ltd (NAS:EJH) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Yangqiao Road, Dongbai Center, 18th Floor, East Tower, Building B, Gulou District, Fuzhou, CHN, 350001

Website

https://www.ej111.com

E-Home Household Service Holdings Ltd is a household service company providing integrated household services through its website and WeChat platform across China. The company offers services including home appliance and housekeeping services. It operates its business mainly by receiving the orders online and providing the services offline. Its operations are organized into five reportable segments: installation and maintenance services, housekeeping services, senior care services, sales of pharmaceutical products and educational consulting services. The group's principal source of revenue comes from the Installation and Maintenance segment, followed by Housekeeping and Senior care services segment.