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Guangdong Leadyo IC Testing Co (SHSE:688135) ROIC % : -0.35% (As of Mar. 2024)


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What is Guangdong Leadyo IC Testing Co 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 %. Guangdong Leadyo IC Testing Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was -0.35%.

As of today (2024-05-28), Guangdong Leadyo IC Testing Co's WACC % is 6.53%. Guangdong Leadyo IC Testing Co's ROIC % is 4.26% (calculated using TTM income statement data). Guangdong Leadyo IC Testing Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Guangdong Leadyo IC Testing Co ROIC % Historical Data

The historical data trend for Guangdong Leadyo IC Testing Co'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.

* Premium members only.

Guangdong Leadyo IC Testing Co ROIC % Chart

Guangdong Leadyo IC Testing Co Annual Data
Trend Dec13 Dec14 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial Premium Member Only 15.97 10.32 12.22 3.49 3.17

Guangdong Leadyo IC Testing Co Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.65 3.43 3.38 -0.56 -0.35

Competitive Comparison of Guangdong Leadyo IC Testing Co's ROIC %

For the Semiconductors subindustry, Guangdong Leadyo IC Testing Co'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.


Guangdong Leadyo IC Testing Co's ROIC % Distribution in the Semiconductors Industry

For the Semiconductors industry and Technology sector, Guangdong Leadyo IC Testing Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Guangdong Leadyo IC Testing Co's ROIC % falls into.



Guangdong Leadyo IC Testing Co ROIC % Calculation

Guangdong Leadyo IC Testing Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

ROIC % (A: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2022 ) + Invested Capital (A: Dec. 2023 ))/ count )
=21.623 * ( 1 - -150.25% )/( (1442.41 + 1971.179)/ 2 )
=54.1115575/1706.7945
=3.17 %

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))
=1693.987 - 108.095 - ( 222.407 - max(0, 280.716 - 424.198+222.407))
=1442.41

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))
=2074.242 - 159.345 - ( 103.565 - max(0, 417.204 - 360.922+103.565))
=1971.179

Guangdong Leadyo IC Testing Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

ROIC % (Q: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2023 ) + Invested Capital (Q: Mar. 2024 ))/ count )
=16.096 * ( 1 - 143.96% )/( (1971.179 + 2091.538)/ 2 )
=-7.0758016/2031.3585
=-0.35 %

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))
=2074.242 - 159.345 - ( 103.565 - max(0, 417.204 - 360.922+103.565))
=1971.179

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))
=2165.642 - 160.536 - ( 103.459 - max(0, 450.688 - 364.256+103.459))
=2091.538

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

* 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.


Guangdong Leadyo IC Testing Co  (SHSE:688135) 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, Guangdong Leadyo IC Testing Co's WACC % is 6.53%. Guangdong Leadyo IC Testing Co's ROIC % is 4.26% (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.


Guangdong Leadyo IC Testing Co ROIC % Related Terms

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Guangdong Leadyo IC Testing Co (SHSE:688135) Business Description

Traded in Other Exchanges
N/A
Address
No. 2, Xinfeng East 2nd Road, Wanjiang Street, Mowu, Guangdong Province, Dongguan, CHN, 523050
Guangdong Leadyo IC Testing Co Ltd is engaged in integrated circuit testing program development, 12-inch and 8-inch wafer testing services, finished chip testing services, and supporting services related to integrated circuit testing. It specializes in the semiconductor back-end processing step including the manufacture of integrated circuits of wafer testing, wafer thinning, wafer cutting, product testing and IC taping one-stop service, IC testing and provide software development, chip testing analysis, Load Board MPW production and engineering validation and Probe Card batch production, and other related services.
Executives
Yuan Jun Director, core technical staff
Zhang Yi Feng Directors, senior managers, core technical personn
Gu Shi Tao Directors, senior managers, core technical personn
Zhang Li Ping Supervisors
Qu Hao Director
Lu Xu Kun Core technical personnel
Zheng Chao Sheng Core technical personnel
Deng Xian Xue Supervisors
Xu Jie Feng Supervisors
Huang Zhu Director
Huang Jiang Director

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