Pegmatite One Lithium and Gold (XCNQ:PGA) ROC % : -140.62% (As of Feb. 2024)

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What is Pegmatite One Lithium and Gold 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 %. Pegmatite One Lithium and Gold's annualized return on capital (ROC %) for the quarter that ended in Feb. 2024 was -140.62%.

As of today (2024-06-06), Pegmatite One Lithium and Gold's WACC % is 9.70%. Pegmatite One Lithium and Gold's ROC % is -51.15% (calculated using TTM income statement data). Pegmatite One Lithium and Gold earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Pegmatite One Lithium and Gold ROC % Historical Data

The historical data trend for Pegmatite One Lithium and Gold'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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Pegmatite One Lithium and Gold ROC % Chart

Pegmatite One Lithium and Gold Annual Data

Trend

Aug21

Aug22

Aug23

ROC %

-53.33

-41.29

-36.80

Pegmatite One Lithium and Gold Quarterly Data
	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
ROC %	Get a 7-Day Free Trial							-29.76	-33.97	-26.35	-94.64	-140.62

Pegmatite One Lithium and Gold ROC % Calculation

Pegmatite One Lithium and Gold's annualized Return on Capital (ROC %) for the fiscal year that ended in Aug. 2023 is calculated as:

	ROC % (A: Aug. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Aug. 2022 )	+	Invested Capital (A: Aug. 2023 ))	/ count )
=	-0.389 * ( 1 - 0% )	/	( (1.614	+	0.5)	/ 2 )
=	-0.389	/	1.057
=	-36.80 %

where

	Invested Capital		(A: Aug. 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	))
=	1.734	-	0.069	-	( 0.102	-	max(0, 0.069	-	0.12	+	0.102	))
=	1.614

	Invested Capital		(A: Aug. 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	))
=	0.81	-	0.28	-	( 0.258	-	max(0, 0.28	-	0.31	+	0.258	))
=	0.5

Pegmatite One Lithium and Gold's annualized Return on Capital (ROC %) for the quarter that ended in Feb. 2024 is calculated as:

	ROC % (Q: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Nov. 2023 )	+	Invested Capital (Q: Feb. 2024 ))	/ count )
=	-0.592 * ( 1 - 0% )	/	( (0.489	+	0.353)	/ 2 )
=	-0.592	/	0.421
=	-140.62 %

where

	Invested Capital		(Q: Nov. 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	))
=	0.621	-	0.208	-	( 0.1	-	max(0, 0.208	-	0.132	+	0.1	))
=	0.489

	Invested Capital		(Q: Feb. 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	))
=	0.548	-	0.261	-	( 0.056	-	max(0, 0.261	-	0.195	+	0.056	))
=	0.353

Note: The Operating Income data used here is four times the quarterly (Feb. 2024) data.

Pegmatite One Lithium and Gold (XCNQ:PGA) 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, Pegmatite One Lithium and Gold's WACC % is 9.70%. Pegmatite One Lithium and Gold's ROC % is -51.15% (calculated using TTM income statement data). Pegmatite One Lithium and Gold 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.

Pegmatite One Lithium and Gold ROC % Related Terms

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Pegmatite One Lithium and Gold (XCNQ:PGA) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Pegmatite One Lithium and Gold Corp (XCNQ:PGA) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

789 West Pender Street, Suite 1240, Vancouver, BC, CAN, V6C 1H2

Website

https://www.madiminerals.com

Pegmatite One Lithium and Gold Corp, formerly Madi Minerals Ltd is focused entirely on gold exploration in British Columbia. Its objective is to locate and develop economic precious and base metal properties of merit and to conduct its exploration. The company includes two projects in the there portfolio: the Georgina Project and Morrison River Property.

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