Mach7 Technologies (ASX:M7T) ROC % : -17.41% (As of Dec. 2023)

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What is Mach7 Technologies 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 %. Mach7 Technologies's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -17.41%.

As of today (2024-06-06), Mach7 Technologies's WACC % is 16.27%. Mach7 Technologies's ROC % is -19.90% (calculated using TTM income statement data). Mach7 Technologies earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Mach7 Technologies ROC % Historical Data

The historical data trend for Mach7 Technologies'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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Mach7 Technologies ROC % Chart

Mach7 Technologies Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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-40.58

1.90

-24.22

-18.16

-4.79

Mach7 Technologies Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															-1.50	-39.13	-0.55	-9.49	-17.41

Mach7 Technologies ROC % Calculation

Mach7 Technologies'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 )
=	-17.167 * ( 1 - 84.25% )	/	( (53.942	+	58.849)	/ 2 )
=	-2.7038025	/	56.3955
=	-4.79 %

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	))
=	78.922	-	3.167	-	( 25.748	-	max(0, 10.387	-	32.2	+	25.748	))
=	53.942

	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	))
=	82.306	-	3.398	-	( 23.395	-	max(0, 14.831	-	34.89	+	23.395	))
=	58.849

Mach7 Technologies'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 )
=	-11.54 * ( 1 - 16.22% )	/	( (58.849	+	52.228)	/ 2 )
=	-9.668212	/	55.5385
=	-17.41 %

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	))
=	82.306	-	3.398	-	( 23.395	-	max(0, 14.831	-	34.89	+	23.395	))
=	58.849

	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	))
=	73.788	-	2.439	-	( 22.729	-	max(0, 12.579	-	31.7	+	22.729	))
=	52.228

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

Mach7 Technologies (ASX:M7T) 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, Mach7 Technologies's WACC % is 16.27%. Mach7 Technologies's ROC % is -19.90% (calculated using TTM income statement data). Mach7 Technologies 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.

Mach7 Technologies ROC % Related Terms

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Mach7 Technologies (ASX:M7T) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » Mach7 Technologies Ltd (ASX:M7T) » Definitions » ROC %

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Address

120 Kimball Avenue, Suite 210, South Burlington, VT, USA, 05403

Website

https://www.mach7t.com

Mach7 Technologies Ltd is engaged in enterprise imaging data sharing, storage, and interoperability for healthcare enterprises globally. The principal activity of the Company is the development and commercialisation of medical imaging and data, management software solutions for global healthcare enterprises The company's operating segment includes Software licenses and Professional services. It generates maximum revenue from the Software licenses segment. Geographically, it derives a majority of its revenue from North America and also has a presence in the Middle East; Asia/Pacific and Europe, and other regions. The company's solutions include Management Studio; Diagnostic Studio; and Clinical Studio.

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