Energy Solar Tech (XMAD:ETC) ROC % : 2.99% (As of Dec. 2021)

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What is Energy Solar Tech 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 %. Energy Solar Tech's annualized return on capital (ROC %) for the quarter that ended in Dec. 2021 was 2.99%.

As of today (2024-06-11), Energy Solar Tech's WACC % is 0.00%. Energy Solar Tech's ROC % is 0.00% (calculated using TTM income statement data). Energy Solar Tech earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Energy Solar Tech ROC % Historical Data

The historical data trend for Energy Solar Tech'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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Energy Solar Tech ROC % Chart

Energy Solar Tech Annual Data

Trend

Dec20

Dec21

ROC %

-2.02

2.99

Energy Solar Tech Semi-Annual Data
	Dec20	Dec21
ROC %	-2.02	2.99

Energy Solar Tech ROC % Calculation

Energy Solar Tech's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2021 is calculated as:

	ROC % (A: Dec. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2020 )	+	Invested Capital (A: Dec. 2021 ))	/ count )
=	0.156 * ( 1 - 10.59% )	/	( (1.218	+	8.121)	/ 2 )
=	0.1394796	/	4.6695
=	2.99 %

where

	Invested Capital		(A: Dec. 2020 )
=	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	))
=	2.724	-	0.137	-	( 1.369	-	max(0, 0.175	-	1.611	+	1.369	))
=	1.218

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	9.391	-	0.483	-	( 2.511	-	max(0, 2.635	-	3.422	+	2.511	))
=	8.121

Energy Solar Tech's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2021 is calculated as:

	ROC % (Q: Dec. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2020 )	+	Invested Capital (Q: Dec. 2021 ))	/ count )
=	0.156 * ( 1 - 10.59% )	/	( (1.218	+	8.121)	/ 2 )
=	0.1394796	/	4.6695
=	2.99 %

where

	Invested Capital		(Q: Dec. 2020 )
=	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	))
=	2.724	-	0.137	-	( 1.369	-	max(0, 0.175	-	1.611	+	1.369	))
=	1.218

	Invested Capital		(Q: Dec. 2021 )
=	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	))
=	9.391	-	0.483	-	( 2.511	-	max(0, 2.635	-	3.422	+	2.511	))
=	8.121

Note: The Operating Income data used here is one times the annual (Dec. 2021) data.

Energy Solar Tech (XMAD:ETC) 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, Energy Solar Tech's WACC % is 0.00%. Energy Solar Tech's ROC % is 0.00% (calculated using TTM income statement data). Energy Solar Tech 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.

Energy Solar Tech ROC % Related Terms

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Energy Solar Tech (XMAD:ETC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Independent Power Producers » Energy Solar Tech SA (XMAD:ETC) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

DH4:Germany

Address

C/ Ruso, 18, Las Rozas de Madrid, Madrid, ESP, 28290

Website

https://www.energysolartech.com

Energy Solar Tech SA is a technology company in the energy sector whose mission is to facilitate the migration of companies to renewable energies, The company offers its clients energy generation and efficiency technologies through its offer of energy Outsourcing services under the Energy As A Service model.

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