I had the same query, and I understand now. 

I will further add to Alexander's well-explained answer. As he mentioned, 9/10 times we can use this refactoring strategy. I will add where not to apply this

1. If you have a database query operation involved 
2. if you are reading from a file
3. if anything involves with complexity greater than or equal to O(n^2)

Also, I think it is possible to calculate it once and store it as a class variable instead of a local variable.