1414 Degrees (ASX:14D) ROC % : -21.30% (As of Dec. 2023)

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What is 1414 Degrees 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 %. 1414 Degrees's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -21.30%.

As of today (2024-05-23), 1414 Degrees's WACC % is 7.93%. 1414 Degrees's ROC % is -21.91% (calculated using TTM income statement data). 1414 Degrees earns returns that do not match up to its cost of capital. It will destroy value as it grows.

1414 Degrees ROC % Historical Data

The historical data trend for 1414 Degrees'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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1414 Degrees ROC % Chart

1414 Degrees Annual Data

Trend

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

-60.55

-32.51

-33.73

-45.03

-20.53

1414 Degrees Semi-Annual Data
	Dec17	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial							-66.15	-29.86	-14.69	-23.55	-21.30

1414 Degrees ROC % Calculation

1414 Degrees's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	-1.57 * ( 1 - 0% )	/	( (7.998	+	7.293)	/ 2 )
=	-1.57	/	7.6455
=	-20.53 %

where

	Invested Capital		(A: Jun. 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	))
=	11.992	-	0.445	-	( 3.549	-	max(0, 1.209	-	7.129	+	3.549	))
=	7.998

	Invested Capital		(A: 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	))
=	9.727	-	0.486	-	( 1.948	-	max(0, 0.872	-	4.606	+	1.948	))
=	7.293

1414 Degrees'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: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-1.634 * ( 1 - 0% )	/	( (7.293	+	8.051)	/ 2 )
=	-1.634	/	7.672
=	-21.30 %

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	))
=	9.727	-	0.486	-	( 1.948	-	max(0, 0.872	-	4.606	+	1.948	))
=	7.293

	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	))
=	9.736	-	0.242	-	( 1.443	-	max(0, 0.705	-	5.256	+	1.443	))
=	8.051

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

1414 Degrees (ASX:14D) 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, 1414 Degrees's WACC % is 7.93%. 1414 Degrees's ROC % is -21.91% (calculated using TTM income statement data). 1414 Degrees 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.

1414 Degrees ROC % Related Terms

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1414 Degrees (ASX:14D) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Independent Power Producers » 1414 Degrees Ltd (ASX:14D) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

136 Daws Road, Melrose Park, Sydney, SA, AUS, 5039

Website

https://www.1414degrees.com.au

1414 Degrees Ltd is focused on storing and output of electric power. The company patented thermal energy storage system (TESS) storing energy as latent heat in running silicon. It delivers an output of heat and electricity is sourced from renewables or the grid and is stored as latent heat at a constant temperature. Geographically, it operates only in Australia.

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