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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 %. Key Energy Services's annualized return on capital (ROC %) for the quarter that ended in Sep. 2020 was -17.01%.
As of today (2024-05-25), Key Energy Services's WACC % is 0.00%. Key Energy Services's ROC % is 0.00% (calculated using TTM income statement data). Key Energy Services earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Key Energy Services'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.
Key Energy Services Annual Data | |||||||||||||||||||||
Trend | Dec10 | Dec11 | Dec12 | Dec13 | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | |||||||||||
ROC % | Get a 7-Day Free Trial | -16.69 | -34.89 | -21.25 | -16.24 | -21.41 |
Key Energy Services Quarterly Data | ||||||||||||||||||||
Dec15 | Mar16 | Jun16 | Sep16 | Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | |
ROC % | Get a 7-Day Free Trial | -23.08 | -29.05 | -18.20 | -29.00 | -17.01 |
Key Energy Services's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2019 is calculated as:
ROC % (A: Dec. 2019 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2018 ) | + | Invested Capital (A: Dec. 2019 )) | / count ) |
= | -67.886 * ( 1 - 3.92% ) | / | ( (322.402 | + | 286.949) | / 2 ) |
= | -65.2248688 | / | 304.6755 | |||
= | -21.41 % |
where
Invested Capital | (A: Dec. 2018 ) | |||||||||||
= | 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 | )) |
= | 443.174 | - | 70.461 | - | ( 50.311 | - | max(0, 103.464 | - | 158.498 | + | 50.311 | )) |
= | 322.402 |
Invested Capital | (A: Dec. 2019 ) | |||||||||||
= | 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 | )) |
= | 347.87 | - | 61.663 | - | ( 14.426 | - | max(0, 102.334 | - | 101.592 | + | 14.426 | )) |
= | 286.949 |
Key Energy Services's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2020 is calculated as:
ROC % (Q: Sep. 2020 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Jun. 2020 ) | + | Invested Capital (Q: Sep. 2020 )) | / count ) |
= | -40.084 * ( 1 - 0.03% ) | / | ( (240.812 | + | 230.234) | / 2 ) |
= | -40.0719748 | / | 235.523 | |||
= | -17.01 % |
where
Invested Capital | (Q: Jun. 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 | )) |
= | 269.193 | - | 31.05 | - | ( 6.864 | - | max(0, 61.324 | - | 58.655 | + | 6.864 | )) |
= | 240.812 |
Invested Capital | (Q: Sep. 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 | )) |
= | 256.56 | - | 32.792 | - | ( 4.542 | - | max(0, 61.61 | - | 55.144 | + | 4.542 | )) |
= | 230.234 |
Note: The Operating Income data used here is four times the quarterly (Sep. 2020) 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.
Key Energy Services (OTCPK:KEGX) 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, Key Energy Services's WACC % is 0.00%. Key Energy Services's ROC % is 0.00% (calculated using TTM income statement data). Key Energy Services 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 Key Energy Services's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Louis Coale | officer: VP and Controller | 41 ROLLING LINKS SPRING TX 77386 |
Nelson Haight | officer: Chief Financial Officer | 4400 POST OAK PARKWAY, SUITE 1900, HOUSTON TX 77027 |
Marcus C Rowland | director | 920 MEMORIAL CITY WAY, SUITE 850, HOUSTON TX 77024 |
Alan B. Menkes | director | 1160 DAIRY ASHFORD RD, STE 160, HOUSTON TX 77079 |
Katherine Hargis | officer: VP, CLO and Secretary | 1301 MCKINNEY STREET SUITE 1800 HOUSTON TX 77010 |
Sherman Iii Edmiston | director | ONE CITYPLACE DRIVE, SUITE 300, ONE CITYPLACE DRIVE, SUITE 300, ST. LOUIS MO 63141 |
Wommack H H Iii | director | SOUTHWEST ROYALTIES INC, 407 N BIG SPRING STREET SUITE 300, MIDLAND TX 79701 |
Jacob Kotzubei | director | 360 NORTH CRESCENT DRIVE, BEVERLY HILLS CA 90210 |
J Marshall Dodson | officer: President, CEO, Interim CFO | C/O KEY ENERGY SERVICES, INC. 1301 MCKINNEY STREET, SUITE 1800 HOUSTON TX 77010 |
Goldman Sachs & Co. Llc | 10 percent owner | 200 WEST STREET, NEW YORK NY 10282 |
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Bluemountain Gp Holdings, Llc | 10 percent owner | 280 PARK AVENUE,, 12TH FLOOR, NEW YORK NY 10017 |
Blue Mountain Credit Alternatives Master Fund L.p. | 10 percent owner | C/O BLUEMOUNTAIN CAPITAL MANAGEMENT, LLC, 280 PARK AVENUE, 5TH FLOOR EAST, NEW YORK NY 10017 |
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