Enthusiast Gaming Holdings (Enthusiast Gaming Holdings) ROIC % : -11.89% (As of Sep. 2023)

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What is Enthusiast Gaming 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 %. Enthusiast Gaming Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was -11.89%.

As of today (2024-04-26), Enthusiast Gaming Holdings's WACC % is 11.78%. Enthusiast Gaming Holdings's ROIC % is -12.46% (calculated using TTM income statement data). Enthusiast Gaming Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Enthusiast Gaming Holdings ROIC % Historical Data

The historical data trend for Enthusiast Gaming 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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Enthusiast Gaming Holdings ROIC % Chart

Enthusiast Gaming Holdings Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

ROIC %

-13.51

-9.65

-17.15

-13.21

Enthusiast Gaming Holdings Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23
ROIC %	Get a 7-Day Free Trial															-12.52	-13.81	-10.37	-12.69	-11.89

Competitive Comparison of Enthusiast Gaming Holdings's ROIC %

For the Internet Content & Information subindustry, Enthusiast Gaming 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.

Enthusiast Gaming Holdings's ROIC % Distribution in the Interactive Media Industry

For the Interactive Media industry and Communication Services sector, Enthusiast Gaming Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Enthusiast Gaming Holdings's ROIC % falls into.

Enthusiast Gaming Holdings ROIC % Calculation

Enthusiast Gaming Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROIC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	-35.173 * ( 1 - 2.6% )	/	( (283.171	+	235.32)	/ 2 )
=	-34.258502	/	259.2455
=	-13.21 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	302.955	-	26.957	-	( 17.802	-	max(0, 53.475	-	46.302	+	17.802	))
=	283.171

	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	))
=	251.335	-	24.257	-	( 5.551	-	max(0, 43.46	-	35.218	+	5.551	))
=	235.32

Enthusiast Gaming Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROIC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-24.608 * ( 1 - 2.91% )	/	( (222.238	+	179.607)	/ 2 )
=	-23.8919072	/	200.9225
=	-11.89 %

where

	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	))
=	242.243	-	27.127	-	( 2.158	-	max(0, 34.815	-	27.693	+	2.158	))
=	222.238

	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	))
=	198.568	-	30.28	-	( 2.112	-	max(0, 37.684	-	26.365	+	2.112	))
=	179.607

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

Enthusiast Gaming Holdings (OTCPK:EGLXF) 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, Enthusiast Gaming Holdings's WACC % is 11.78%. Enthusiast Gaming Holdings's ROIC % is -12.46% (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.

Enthusiast Gaming Holdings ROIC % Related Terms

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Enthusiast Gaming Holdings (Enthusiast Gaming Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Interactive Media » Enthusiast Gaming Holdings Inc (OTCPK:EGLXF) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

2AV:Germany EGLX:Canada

Address

90 Eglinton Avenue East, Suite 805, Toronto, ON, CAN, M4P 2Y3

Website

https://www.enthusiastgaming.com

Enthusiast Gaming Holdings Inc is a gaming company building a media platform for video games and esports fans to connect and engage worldwide. Reaching over 300 million gamers every month, the company is a member of the Comscore 100 ranking of the top Internet Properties in the U.S. and the largest in the Gaming Information category on mobile devices. Combining the elements of its four core pillars; Media, Talent, Esports and Experiential, Enthusiast Gaming provides an engagement opportunity resulting in more points of connection than any other video game and esports platform, with unparalleled access to the influential and lucrative GenZ and Millennial audience. It has one segment which is digital media and entertainment. It generates a majority of its revenue from Media and content.