Golden Mile Resources (ASX:G88) ROC % : -30.66% (As of Dec. 2023)

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What is Golden Mile Resources 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 %. Golden Mile Resources's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -30.66%.

As of today (2024-06-01), Golden Mile Resources's WACC % is 16.09%. Golden Mile Resources's ROC % is -33.25% (calculated using TTM income statement data). Golden Mile Resources earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Golden Mile Resources ROC % Historical Data

The historical data trend for Golden Mile Resources'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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Golden Mile Resources ROC % Chart

Golden Mile Resources Annual Data

Trend

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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-30.97

-210.14

-96.74

-41.06

-36.29

Golden Mile Resources Semi-Annual Data
	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial							-41.14	-38.91	-39.49	-36.36	-30.66

Golden Mile Resources ROC % Calculation

Golden Mile Resources'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 )
=	-1.395 * ( 1 - 0% )	/	( (3.107	+	4.581)	/ 2 )
=	-1.395	/	3.844
=	-36.29 %

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	))
=	5.136	-	0.321	-	( 1.962	-	max(0, 0.321	-	2.029	+	1.962	))
=	3.107

	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	))
=	6.983	-	0.38	-	( 2.357	-	max(0, 0.399	-	2.421	+	2.357	))
=	4.581

Golden Mile Resources'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 )
=	-1.55 * ( 1 - 0% )	/	( (4.581	+	5.53)	/ 2 )
=	-1.55	/	5.0555
=	-30.66 %

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	))
=	6.983	-	0.38	-	( 2.357	-	max(0, 0.399	-	2.421	+	2.357	))
=	4.581

	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	))
=	6.088	-	0.103	-	( 0.502	-	max(0, 0.118	-	0.573	+	0.502	))
=	5.53

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

Golden Mile Resources (ASX:G88) 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, Golden Mile Resources's WACC % is 16.09%. Golden Mile Resources's ROC % is -33.25% (calculated using TTM income statement data). Golden Mile Resources 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.

Golden Mile Resources ROC % Related Terms

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Golden Mile Resources (ASX:G88) Business Description

Industry

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Address

126 Phillip Street, Level 5, Sydney, NSW, AUS, 2000

Website

https://www.goldenmileresources.com.au

Golden Mile Resources Ltd is an Australian based exploration company that owns several resource tenements in Western Australia and are actively exploring the tenements for gold, nickel and cobalt and related resources. Its projects include Quicksilver Nickel-Cobalt Project, Minara Nickel-Cobalt Project, Ironstone Well Au Project, Murchison Lithium and Gold, Yarrambee Project, Darlot Au Project, Yuinmery Project, Gidgee Polymetallic Project and Leonora East Gold Project. The principal business and geographical segment of the company is Mineral Exploration within Western Australia.

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