Adriatic Metals (ASX:ADT) ROC % : -17.46% (As of Dec. 2023)

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What is Adriatic Metals 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 %. Adriatic Metals's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -17.46%.

As of today (2024-06-09), Adriatic Metals's WACC % is 13.19%. Adriatic Metals's ROC % is -14.48% (calculated using TTM income statement data). Adriatic Metals earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Adriatic Metals ROC % Historical Data

The historical data trend for Adriatic Metals'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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Adriatic Metals ROC % Chart

Adriatic Metals Annual Data

Trend

Jun17

Jun18

Jun19

Jun20

Dec21

Dec22

Dec23

ROC %

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-64.21

-83.28

-32.89

-21.52

-14.09

Adriatic Metals Semi-Annual Data
	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial							-22.71	-13.30	-28.85	-10.73	-17.46

Adriatic Metals ROC % Calculation

Adriatic Metals'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 )
=	-42.53 * ( 1 - 0% )	/	( (165.126	+	438.377)	/ 2 )
=	-42.53	/	301.7515
=	-14.09 %

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	))
=	258.95	-	4.037	-	( 89.787	-	max(0, 11.443	-	117.695	+	89.787	))
=	165.126

	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	))
=	434.533	-	21.3	-	( 67.015	-	max(0, 114.218	-	89.074	+	67.015	))
=	438.377

Adriatic Metals'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 )
=	-61.724 * ( 1 - 0% )	/	( (268.811	+	438.377)	/ 2 )
=	-61.724	/	353.594
=	-17.46 %

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	))
=	398.945	-	2.587	-	( 127.547	-	max(0, 34.648	-	165.232	+	127.547	))
=	268.811

	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	))
=	434.533	-	21.3	-	( 67.015	-	max(0, 114.218	-	89.074	+	67.015	))
=	438.377

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

Adriatic Metals (ASX:ADT) 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, Adriatic Metals's WACC % is 13.19%. Adriatic Metals's ROC % is -14.48% (calculated using TTM income statement data). Adriatic Metals 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.

Adriatic Metals ROC % Related Terms

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Adriatic Metals (ASX:ADT) Business Description

Industry

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Address

65 Rodney Road, Ground Floor, Regent House, Cheltenham, GBR, GL50 1HX

Website

https://www.adriaticmetals.com

Adriatic Metals PLC is engaged in mineral exploration. The projects of the company are The Veovaca and The Raska. The Veovaca is historic open-cut zinc, lead, barite, and silver mine and the Raska project is an advanced exploration project which exhibits exceptionally high grades of the base and precious metals and is located approximately 17km North-West of the Veovaca Project.