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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Alphatec Holdings's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -32.56%.
As of today (2024-06-04), Alphatec Holdings's WACC % is 8.61%. Alphatec Holdings's ROC % is -35.32% (calculated using TTM income statement data). Alphatec Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Alphatec 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.
Alphatec Holdings Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
ROC % | Get a 7-Day Free Trial | -45.68 | -47.68 | -52.67 | -37.51 | -37.47 |
Alphatec Holdings Quarterly Data | ||||||||||||||||||||
Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | |
ROC % | Get a 7-Day Free Trial | -43.54 | -43.46 | -33.88 | -31.92 | -32.56 |
Alphatec Holdings'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 ) |
= | -148.276 * ( 1 - 0.15% ) | / | ( (334.786 | + | 455.565) | / 2 ) |
= | -148.053586 | / | 395.1755 | |||
= | -37.47 % |
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 | )) |
= | 520.968 | - | 101.486 | - | ( 84.696 | - | max(0, 138.87 | - | 255.634 | + | 84.696 | )) |
= | 334.786 |
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 | )) |
= | 805.208 | - | 128.673 | - | ( 220.97 | - | max(0, 157.574 | - | 451.091 | + | 220.97 | )) |
= | 455.565 |
Alphatec Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:
ROC % (Q: Mar. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Dec. 2023 ) | + | Invested Capital (Q: Mar. 2024 )) | / count ) |
= | -152.968 * ( 1 - 0.14% ) | / | ( (455.565 | + | 482.629) | / 2 ) |
= | -152.7538448 | / | 469.097 | |||
= | -32.56 % |
where
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 | )) |
= | 805.208 | - | 128.673 | - | ( 220.97 | - | max(0, 157.574 | - | 451.091 | + | 220.97 | )) |
= | 455.565 |
Invested Capital | (Q: Mar. 2024 ) | |||||||||||
= | 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 | )) |
= | 774.581 | - | 147.867 | - | ( 144.085 | - | max(0, 169.286 | - | 405.292 | + | 144.085 | )) |
= | 482.629 |
Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.
* 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.
Alphatec Holdings (NAS:ATEC) 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, Alphatec Holdings's WACC % is 8.61%. Alphatec Holdings's ROC % is -35.32% (calculated using TTM income statement data). Alphatec 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.
Thank you for viewing the detailed overview of Alphatec Holdings's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
David Sponsel | officer: EVP, Sales | C/O ALPHATEC SPINE, INC., 5818 EL CAMINO REAL, CARLSBAD CA 92008 |
David M Demski | director | C/O GLOBUS MEDICAL, INC., 2560 GENERAL ARMISTEAD AVENUE, AUDUBON PA 19403 |
Patrick Miles | director, officer: Executive Chairman | 7475 LUSK BLVD., SAN DIEGO CA 92121 |
Tullis James L L | director, 10 percent owner | 100 FIRST STAMFORD PLACE, STAMFORD CT 06907 |
David H Mowry | director | 9775 TOLEDO, IRVINE CA 92618 |
Evan Bakst | director | 225 CENTRAL PARK WEST, APT. 1605, NEW YORK NY 10024 |
Jennifer N. Pritzker | 10 percent owner | C/O SQUADRON CAPITAL LLC, 104 S. MICHIGAN AVENUE, SUITE 500, CHICAGO IL 60603 |
Tyson Eliot Marshall | officer: GENERAL COUNSEL & CORP. SEC. | 10680 TREENA STREET, SUITE 500, SAN DIEGO CA 92131 |
Craig E Hunsaker | officer: See Remarks | C/O ALPHATEC HOLDINGS, INC., 5818 EL CAMINO REAL, CARLSBAD CA 92008 |
Elizabeth Ann Altman | director | 10070 BARNES CANYON ROAD, SAN DIEGO CA 92121 |
Paul Segal | 10 percent owner | 1700 BROADWAY, 35TH FLOOR, NEW YORK NY 10019 |
L-5 Healthcare Partners, Llc | 10 percent owner, other: Director by deputization | 1700 BROADWAY, 35TH FLOOR, NEW YORK NY 10019 |
John Todd Koning | officer: Chief Financial Officer | C/O MASIMO CORPORATION, 52 DISCOVERY, IRVINE CA 92618 |
David R Pelizzon | director, 10 percent owner | 2850 FRONTIER DR, WARSAW IN 46582 |
Scott Lish | officer: SVP, Development | C/O ALPHATEC SPINE, INC., 5818 EL CAMINO REAL, CARLSBAD CA 92008 |
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