Hudbay Minerals (Hudbay Minerals) ROC % : 4.48% (As of Dec. 2023)

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What is Hudbay Minerals 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 %. Hudbay Minerals's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 4.48%.

As of today (2024-04-27), Hudbay Minerals's WACC % is 11.29%. Hudbay Minerals's ROC % is 3.02% (calculated using TTM income statement data). Hudbay Minerals earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Hudbay Minerals ROC % Historical Data

The historical data trend for Hudbay Minerals'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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Hudbay Minerals ROC % Chart

Hudbay Minerals Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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1.44

-0.62

1.17

5.53

3.10

Hudbay Minerals Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial															3.18	1.53	0.22	5.03	4.48

Hudbay Minerals ROC % Calculation

Hudbay Minerals's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	301.922 * ( 1 - 54.2% )	/	( (4033.891	+	4884.131)	/ 2 )
=	138.280276	/	4459.011
=	3.10 %

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	))
=	4325.943	-	215.518	-	( 225.665	-	max(0, 447.647	-	524.181	+	225.665	))
=	4033.891

	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	))
=	5312.634	-	292.59	-	( 250.516	-	max(0, 537.335	-	673.248	+	250.516	))
=	4884.131

Hudbay Minerals's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	527.252 * ( 1 - 58.6% )	/	( (4856.396	+	4884.131)	/ 2 )
=	218.282328	/	4870.2635
=	4.48 %

where

	Invested Capital		(Q: Sep. 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	))
=	5250.596	-	265.737	-	( 246.489	-	max(0, 502.785	-	631.248	+	246.489	))
=	4856.396

	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	))
=	5312.634	-	292.59	-	( 250.516	-	max(0, 537.335	-	673.248	+	250.516	))
=	4884.131

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Hudbay Minerals (NYSE:HBM) 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, Hudbay Minerals's WACC % is 11.29%. Hudbay Minerals's ROC % is 3.02% (calculated using TTM income statement data). Hudbay Minerals 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.

Hudbay Minerals ROC % Related Terms

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Hudbay Minerals (Hudbay Minerals) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Hudbay Minerals Inc (NYSE:HBM) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

HBM:Peru OCKA:Germany OCKA:Germany HBM:Canada

Address

25 York Street, Suite 800, Toronto, ON, CAN, M5J 2V5

Website

http://www.hudbayminerals.com

Hudbay Minerals Inc is a Canadian mining company with its operations, property developments, and exploration activities across the United States. The major mines that Hudbay operates are located in Manitoba, Canada, Arizona, United States; and Peru. The company is principally focused on the discovery, production, and marketing of base and precious metals. Hudbay produces copper concentrate, which contains copper, gold, and silver, as well as zinc metal. More than half the company's revenue is attributable to the copper business. The company sells copper concentrates to smelters across Asia, America, and Europe, and sells Zinc metal, the next biggest source of revenue, to industrial customers across North America.