Premium Nickel Resources (TSXV:PNRL) ROIC % : -25.00% (As of Dec. 2023)

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What is Premium Nickel Resources ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Premium Nickel Resources's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -25.00%.

As of today (2024-05-16), Premium Nickel Resources's WACC % is 10.23%. Premium Nickel Resources's ROIC % is -21.72% (calculated using TTM income statement data). Premium Nickel Resources earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Premium Nickel Resources ROIC % Historical Data

The historical data trend for Premium Nickel Resources's ROIC % 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.

* Premium members only.

Premium Nickel Resources ROIC % Chart

Premium Nickel Resources Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

-5.76

-14.17

-67.77

-20.30

Premium Nickel Resources Quarterly Data
	Dec19	Dec20	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROIC %	Get a 7-Day Free Trial								-22.59	-18.39	-23.37	-20.22	-25.00

Competitive Comparison of Premium Nickel Resources's ROIC %

For the Other Industrial Metals & Mining subindustry, Premium Nickel Resources's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Premium Nickel Resources's ROIC % Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Premium Nickel Resources's ROIC % distribution charts can be found below:

* The bar in red indicates where Premium Nickel Resources's ROIC % falls into.

Premium Nickel Resources ROIC % Calculation

Premium Nickel Resources's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-10.652 * ( 1 - 3.79% )	/	( (43.655	+	57.303)	/ 2 )
=	-10.2482892	/	50.479
=	-20.30 %

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	))
=	41.657	-	4.026	-	( 5.163	-	max(0, 12.462	-	6.438	+	5.163	))
=	43.655

	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	))
=	76.371	-	4.28	-	( 19.246	-	max(0, 5.891	-	20.679	+	19.246	))
=	57.303

Premium Nickel Resources's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-13.712 * ( 1 - 0% )	/	( (52.378	+	57.303)	/ 2 )
=	-13.712	/	54.8405
=	-25.00 %

where

	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	))
=	61.719	-	3.148	-	( 8.853	-	max(0, 5.041	-	11.234	+	8.853	))
=	52.378

	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	))
=	76.371	-	4.28	-	( 19.246	-	max(0, 5.891	-	20.679	+	19.246	))
=	57.303

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

Premium Nickel Resources (TSXV:PNRL) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Premium Nickel Resources's WACC % is 10.23%. Premium Nickel Resources's ROIC % is -21.72% (calculated using TTM income statement data).

Be Aware

Like ROE % and ROA %, ROIC % 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.

Premium Nickel Resources ROIC % Related Terms

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Premium Nickel Resources (TSXV:PNRL) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Premium Nickel Resources Ltd (TSXV:PNRL) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

PNRLF:USA O8S:Germany

Address

100 King Street West, One First Canadian Place, Suite 3400, Toronto, ON, CAN, M5X 1A4

Website

https://www.premiumnickelresources.ca

Premium Nickel Resources Ltd is a Canadian company dedicated to the exploration and development of high-quality nickel copper + cobalt resources. The company focuses its efforts on discovering nickel sulphide assets in Botswana, Greenland, and Canada. It has one reportable operating segment being that of the acquisition, exploration and development of mineral properties in three geographic segments being Botswana, Greenland and Canada.

Executives

Richard William Keith Morrison

Director, Senior Officer

Premium Nickel Resources (TSXV:PNRL) Headlines

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