Tottenham Acquisition I (Tottenham Acquisition I) ROC % : -7.11% (As of Sep. 2020)

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What is Tottenham Acquisition I 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 %. Tottenham Acquisition I's annualized return on capital (ROC %) for the quarter that ended in Sep. 2020 was -7.11%.

As of today (2024-04-27), Tottenham Acquisition I's WACC % is 7.37%. Tottenham Acquisition I's ROC % is -2.61% (calculated using TTM income statement data). Tottenham Acquisition I earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Tottenham Acquisition I ROC % Historical Data

The historical data trend for Tottenham Acquisition I'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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Tottenham Acquisition I ROC % Chart

Tottenham Acquisition I Annual Data

Trend

Dec17

Dec18

Dec19

ROC %

-0.70

-1.23

Tottenham Acquisition I Quarterly Data
	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20
ROC %	Get a 7-Day Free Trial						-1.26	-1.97	-1.68	-1.49	-7.11

Tottenham Acquisition I ROC % Calculation

Tottenham Acquisition I's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2019 is calculated as:

	ROC % (A: Dec. 2019 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2018 )	+	Invested Capital (A: Dec. 2019 ))	/ count )
=	-0.588 * ( 1 - 0% )	/	( (46.371	+	49.22)	/ 2 )
=	-0.588	/	47.7955
=	-1.23 %

where

	Invested Capital		(A: Dec. 2018 )
=	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	))
=	47.161	-	0.222	-	( 0.744	-	max(0, 0.222	-	0.79	+	0.744	))
=	46.371

	Invested Capital		(A: Dec. 2019 )
=	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	))
=	48.777	-	0.497	-	( 0.429	-	max(0, 1.417	-	0.477	+	0.429	))
=	49.22

Tottenham Acquisition I's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2020 is calculated as:

	ROC % (Q: Sep. 2020 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2020 )	+	Invested Capital (Q: Sep. 2020 ))	/ count )
=	-1.94 * ( 1 - 0% )	/	( (26.974	+	27.607)	/ 2 )
=	-1.94	/	27.2905
=	-7.11 %

where

	Invested Capital		(Q: Jun. 2020 )
=	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	))
=	25.553	-	0.649	-	( 0.263	-	max(0, 2.346	-	0.276	+	0.263	))
=	26.974

	Invested Capital		(Q: Sep. 2020 )
=	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	))
=	26.119	-	1.384	-	( 0.44	-	max(0, 3.397	-	0.525	+	0.44	))
=	27.607

Note: The Operating Income data used here is four times the quarterly (Sep. 2020) data.

Tottenham Acquisition I (NAS:CLNN) 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, Tottenham Acquisition I's WACC % is 7.37%. Tottenham Acquisition I's ROC % is -2.61% (calculated using TTM income statement data). Tottenham Acquisition I 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.

Tottenham Acquisition I ROC % Related Terms

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Tottenham Acquisition I (Tottenham Acquisition I) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Diversified Financial Services » Tottenham Acquisition I Ltd (NAS:CLNN) » Definitions » ROC %

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Traded in Other Exchanges

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Address

39-41 Wellington Street, Unit 902, Lucky Building, Central, Hong Kong, HKG

Website

Tottenham Acquisition I Ltd is a blank check company formed for the purpose of entering a merger, share exchange, asset acquisition, share purchase, recapitalization or similar business with one or more businesses or entities.