Freedom Care Group Holdings (ASX:FCG) ROC % : -43.96% (As of Dec. 2023)

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What is Freedom Care Group Holdings 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 %. Freedom Care Group Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -43.96%.

As of today (2024-06-08), Freedom Care Group Holdings's WACC % is 9.90%. Freedom Care Group Holdings's ROC % is -21.98% (calculated using TTM income statement data). Freedom Care Group Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Freedom Care Group Holdings ROC % Historical Data

The historical data trend for Freedom Care Group Holdings'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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Freedom Care Group Holdings ROC % Chart

Freedom Care Group Holdings Annual Data

Trend

Jun21

Jun22

ROC %

94.44

-199.27

Freedom Care Group Holdings Semi-Annual Data
	Jun21	Jun22	Dec22	Dec23
ROC %	-	-	108.85	-43.96

Freedom Care Group Holdings ROC % Calculation

Freedom Care Group Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2022 is calculated as:

	ROC % (A: Jun. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2021 )	+	Invested Capital (A: Jun. 2022 ))	/ count )
=	-0.563 * ( 1 - -101.39% )	/	( (0.575	+	0.563)	/ 2 )
=	-1.1338257	/	0.569
=	-199.27 %

where

	Invested Capital		(A: Jun. 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	))
=	1.217	-	0.243	-	( 0.399	-	max(0, 0.538	-	1.021	+	0.399	))
=	0.575

	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	))
=	1.639	-	0.735	-	( 0.924	-	max(0, 1.139	-	1.48	+	0.924	))
=	0.563

Freedom Care Group Holdings'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: Dec. 2022 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-0.504 * ( 1 - -215.51% )	/	( (3.634	+	3.6)	/ 2 )
=	-1.5901704	/	3.617
=	-43.96 %

where

	Invested Capital		(Q: 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	))
=	7.109	-	1.162	-	( 2.313	-	max(0, 2.052	-	4.693	+	2.313	))
=	3.634

	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	))
=	7.357	-	0.796	-	( 3.781	-	max(0, 2.008	-	4.969	+	3.781	))
=	3.6

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

Freedom Care Group Holdings (ASX:FCG) 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, Freedom Care Group Holdings's WACC % is 9.90%. Freedom Care Group Holdings's ROC % is -21.98% (calculated using TTM income statement data). Freedom Care Group Holdings 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.

Freedom Care Group Holdings ROC % Related Terms

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Freedom Care Group Holdings (ASX:FCG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » Freedom Care Group Holdings Ltd (ASX:FCG) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Shop 3/886, Woodville Road, Villawood, NSW, AUS, 2163

Website

https://www.freedomcaregroup.com.au

Freedom Care Group Holdings Ltd is a national disability insurance scheme services provider that provides a full suite of allied health and care services to individuals accepted into the NDIS particularly in the greater Sydney areas. It is organized into three service areas such as Core Supports, Capacity Building Supports and Capital Supports. Core Supports: assist Participants with everyday activities, current disability-related needs and work towards a Participant's goals. Capacity Building Supports: assist Participants to increase independence and develop skills to assist them to pursue their goals and Capital Supports: includes higher-cost pieces of assistive technology, equipment and home or vehicle modifications, and funding for one-off capital purchases that participants require.