ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. S&W Seed Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -8.73%.
As of today (2024-05-22), S&W Seed Co's WACC % is 13.45%. S&W Seed Co's ROC % is -11.53% (calculated using TTM income statement data).
S&W Seed Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
S&W Seed Co ROC % Historical Data
The historical data trend for S&W Seed Co'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.
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.
S&W Seed Co (NAS:SANW) 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, S&W Seed Co's WACC % is 13.45%. S&W Seed Co's ROC % is -11.53% (calculated using TTM income statement data).
S&W Seed Co 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.
S&W Seed Co ROC % Related Terms
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S&W Seed Co is a multi-crop, middle-market agricultural company. It is engaged in the breeding, production, and sale of alfalfa seed and sorghum seed. It also has a growing commercial market presence in sunflower and maintains an active stevia development program. The company's seed platform develops and supplies germplasm designed to produce higher yields for farmers worldwide. It produces approximately 500 seed products and has a sale in more than 40 countries. Its geographical segments include the United States, Australia, Saudi Arabia, Mexico, South Africa, and other countries.
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