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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 %. Protara Therapeutics's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -369.91%.
As of today (2024-06-12), Protara Therapeutics's WACC % is 15.71%. Protara Therapeutics's ROC % is -343.19% (calculated using TTM income statement data). Protara Therapeutics earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Protara Therapeutics'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.
Protara Therapeutics Annual Data | |||||||||||||||
Trend | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||
ROC % | Get a 7-Day Free Trial | -2,104.84 | -192.43 | -80.85 | -66.60 | -198.48 |
Protara Therapeutics 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 | -170.94 | -348.55 | -328.55 | -333.60 | -369.91 |
Protara Therapeutics'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 ) |
= | -43.613 * ( 1 - 0% ) | / | ( (30.604 | + | 13.344) | / 2 ) |
= | -43.613 | / | 21.974 | |||
= | -198.48 % |
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 | )) |
= | 113.29 | - | 2.28 | - | ( 84.37 | - | max(0, 5.74 | - | 86.146 | + | 84.37 | )) |
= | 30.604 |
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 | )) |
= | 78.954 | - | 3.054 | - | ( 65.58 | - | max(0, 6.149 | - | 68.705 | + | 65.58 | )) |
= | 13.344 |
Protara Therapeutics'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 ) |
= | -47.404 * ( 1 - 0% ) | / | ( (13.344 | + | 12.286) | / 2 ) |
= | -47.404 | / | 12.815 | |||
= | -369.91 % |
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 | )) |
= | 78.954 | - | 3.054 | - | ( 65.58 | - | max(0, 6.149 | - | 68.705 | + | 65.58 | )) |
= | 13.344 |
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 | )) |
= | 68.134 | - | 3.436 | - | ( 55.223 | - | max(0, 5.501 | - | 57.913 | + | 55.223 | )) |
= | 12.286 |
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.
Protara Therapeutics (NAS:TARA) 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, Protara Therapeutics's WACC % is 15.71%. Protara Therapeutics's ROC % is -343.19% (calculated using TTM income statement data). Protara Therapeutics 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 Protara Therapeutics's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Patrick Fabbio | officer: Chief Financial Officer | 2 PITNEY COURT, BASKING RIDGE NJ 07920 |
Opaleye Management Inc. | 10 percent owner | ONE BOSTON PLACE, SUITE 2600, BOSTON MA 02108 |
Jesse Shefferman | director, officer: CEO and President | C/O ARTARA THERAPEUTICS,INC., 1 LITTLE WEST 12TH STREET, NEW YORK NY 10014 |
Hannah Fry | officer: VP, Controller | 345 PARK AVENUE SOUTH, 3RD FLOOR, NEW YORK NY 10010 |
Luke M Beshar | director | 550 HILLS DRIVE, 3RD FLOOR, BEDMINSTER NJ 07921 |
Jathin Bandari | officer: Chief Medical Officer | C/O PROTORA THERAPEUTICS, INC., 345 PARK AVENUE SOUTH, 3RD FLOOR, NEW YORK NY 10010 |
Jane Huang | director | C/O MOURANT OZANNES CORPORATE SERVICES, 94 SOLARIS AVENUE, CAMANA BAY, GRAND CAYMAN E9 KY1-1108 |
Martin Sebastian Olivo | officer: Chief Medical Officer | C/O PROTARA THERAPEUTICS, INC., 345 PARK AVENUE SOUTH, 3RD FLOOR, NEW YORK NY 10010 |
Cynthia Smith | director | 508 WRANGLER DRIVE, SUITE 100, COPPELL TX 75019 |
Blaine Davis | officer: Chief Financial Officer | C/O ARTARA THERAPEUTICS, INC., 1 LITTLE WEST 12TH STREET, NEW YORK NY 10014 |
Randall Marshall | 10 percent owner | C/O ARTARA THERAPEUTICS, INC., 1 LITTLE WEST 12TH STREET, NEW YORK NY 10014 |
Barry P Flannelly | director | ROUTE 141 AND HENRY CLAY ROAD, WILMINGTON DE 19880 |
Richard S Levy | director | 860 WASHINGTON STREET, 3RD FLOOR, NEW YORK NY 10014 |
Julio Casoy | officer: Chief Medical Officer | C/O ARTARA THERAPEUTICS, INC., 1 LITTLE WEST 12TH STREET, NEW YORK NY 10014 |
Jacqueline Zummo | officer: Sr. Vice President, Research | C/O ARTARA THERAPEUTICS, INC., 1 LITTLE WEST 12TH STREET, NEW YORK NY 10014 |
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