Stella Diagnostics (Stella Diagnostics) ROC % : -14.66% (As of Sep. 2023)

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What is Stella Diagnostics 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 %. Stella Diagnostics's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was -14.66%.

As of today (2024-06-04), Stella Diagnostics's WACC % is 0.00%. Stella Diagnostics's ROC % is -3.67% (calculated using TTM income statement data). Stella Diagnostics earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Stella Diagnostics ROC % Historical Data

The historical data trend for Stella Diagnostics'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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Stella Diagnostics ROC % Chart

Stella Diagnostics Annual Data

Trend

ROC %

Stella Diagnostics Quarterly Data
	Sep22	Sep23
ROC %	-	-14.66

Stella Diagnostics ROC % Calculation

Stella Diagnostics's annualized Return on Capital (ROC %) for the fiscal year that ended in . 20 is calculated as:

	ROC % (A: . 20 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: . 20 )	+	Invested Capital (A: . 20 ))	/ count )
=	* ( 1 - % )	/	( (	+	)	/ )
=		/
=	%

where

Invested Capital

(A: . 20 )

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

))

(

max(0,

))

Invested Capital

(A: . 20 )

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

))

(

max(0,

))

Stella Diagnostics's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2022 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-1.58 * ( 1 - 0% )	/	( (0	+	10.777)	/ 1 )
=	-1.58	/	10.777
=	-14.66 %

where

	Invested Capital		(Q: Sep. 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	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

	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	))
=	0.441	-	5.725	-	( 0.002	-	max(0, 16.065	-	0.004	+	0.002	))
=	10.777

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

Stella Diagnostics (OTCPK:SLDX) 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, Stella Diagnostics's WACC % is 0.00%. Stella Diagnostics's ROC % is -3.67% (calculated using TTM income statement data). Stella Diagnostics 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.

Stella Diagnostics ROC % Related Terms

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Stella Diagnostics (Stella Diagnostics) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Diagnostics & Research » Stella Diagnostics Inc (OTCPK:SLDX) » Definitions » ROC %

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Address

50 West Broadway, Suite 300, Salt Lake City, UT, USA, 84104

Website

https://www.stelladx.com

Stella Diagnostics Inc is a molecular diagnostics-based organization focused on improving patient management strategies for people living with severe esophageal disease. It is developing first-line diagnostic tools that provide superior molecular information for providers as compared to the current standard screening protocols.