Vertical Aerospace (Vertical Aerospace) ROC % : -468.12% (As of Dec. 2023)

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What is Vertical Aerospace 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 %. Vertical Aerospace's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -468.12%.

As of today (2024-05-18), Vertical Aerospace's WACC % is 15.72%. Vertical Aerospace's ROC % is -276.60% (calculated using TTM income statement data). Vertical Aerospace earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Vertical Aerospace ROC % Historical Data

The historical data trend for Vertical Aerospace'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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Vertical Aerospace ROC % Chart

Vertical Aerospace Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

-147.59

-144.26

-1,829.99

-570.02

-468.30

Vertical Aerospace Quarterly Data
	Dec19	Jun20	Dec20	Jun21	Sep21	Dec21	Jun22	Sep22	Dec22	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial							-406.75	-976.40	-	-527.83	-468.12

Vertical Aerospace ROC % Calculation

Vertical Aerospace'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 )
=	-129.048 * ( 1 - 27.43% )	/	( (16.512	+	23.484)	/ 2 )
=	-93.6501336	/	19.998
=	-468.30 %

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	))
=	184.21	-	19.258	-	( 149.59	-	max(0, 26.197	-	174.637	+	149.59	))
=	16.512

	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	))
=	106.437	-	21.333	-	( 61.62	-	max(0, 23.314	-	97.206	+	61.62	))
=	23.484

Vertical Aerospace'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: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-222.952 * ( 1 - 55.59% )	/	( (18.818	+	23.484)	/ 2 )
=	-99.0129832	/	21.151
=	-468.12 %

where

	Invested Capital		(Q: Sep. 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	))
=	127.885	-	17.281	-	( 91.786	-	max(0, 20.397	-	118.823	+	91.786	))
=	18.818

	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	))
=	106.437	-	21.333	-	( 61.62	-	max(0, 23.314	-	97.206	+	61.62	))
=	23.484

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Vertical Aerospace (NYSE:EVTL) 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, Vertical Aerospace's WACC % is 15.72%. Vertical Aerospace's ROC % is -276.60% (calculated using TTM income statement data). Vertical Aerospace 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.

Vertical Aerospace ROC % Related Terms

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Vertical Aerospace (Vertical Aerospace) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Aerospace & Defense » Vertical Aerospace Ltd (NYSE:EVTL) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

M00:Germany

Address

Chapel Street, Unit 1 Camwal Court, Bristol, GBR, BS2 0UW

Website

https://www.vertical-aerospace.com

Vertical Aerospace Ltd is engaged in making air travel personal, on-demand, and carbon-free. The VX4, Vertical's flagship aircraft, is a piloted electric vertical take-off and landing (eVTOL) vehicle capable of carrying four passengers.