Telecom Argentina (Telecom Argentina) ROC % : -1.81% (As of Dec. 2023)

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What is Telecom Argentina 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 %. Telecom Argentina's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -1.81%.

As of today (2024-04-29), Telecom Argentina's WACC % is 2.05%. Telecom Argentina's ROC % is -0.68% (calculated using TTM income statement data). Telecom Argentina earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Telecom Argentina ROC % Historical Data

The historical data trend for Telecom Argentina'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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Telecom Argentina ROC % Chart

Telecom Argentina Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-2.32

-14.85

1.03

-0.53

-0.25

Telecom Argentina Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial															-2.29	0.99	0.53	-5.53	-1.81

Telecom Argentina ROC % Calculation

Telecom Argentina'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 )
=	-144.072 * ( 1 - 57.53% )	/	( (32880.443	+	15517.668)	/ 2 )
=	-61.1873784	/	24199.0555
=	-0.25 %

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	))
=	32115.432	-	2491.733	-	( 899.487	-	max(0, 5355.336	-	2098.592	+	899.487	))
=	32880.443

	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	))
=	15173.416	-	1357.457	-	( 785.992	-	max(0, 3065.701	-	1363.992	+	785.992	))
=	15517.668

Telecom Argentina's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-409.672 * ( 1 - 43.93% )	/	( (9850.244	+	15517.668)	/ 2 )
=	-229.7030904	/	12683.956
=	-1.81 %

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	))
=	9673.813	-	719.231	-	( 385.401	-	max(0, 1635.285	-	739.623	+	385.401	))
=	9850.244

	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	))
=	15173.416	-	1357.457	-	( 785.992	-	max(0, 3065.701	-	1363.992	+	785.992	))
=	15517.668

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

Telecom Argentina (OTCPK:TCMFF) 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, Telecom Argentina's WACC % is 2.05%. Telecom Argentina's ROC % is -0.68% (calculated using TTM income statement data). Telecom Argentina 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.

Telecom Argentina ROC % Related Terms

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Telecom Argentina (Telecom Argentina) Business Description

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GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » Telecom Argentina SA (OTCPK:TCMFF) » Definitions » ROC %

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TEO:USA TEO:Mexico TEO:Germany TECO2:Argentina

Address

General Hornos 690, Buenos Aires, ARG, C1272ACK

Website

https://institucional.telecom.com.ar

Telecom Argentina SA offers its customers quadruple play services, combining mobile telephony services, cable television services, Internet services and fixed telephony services. It also provides other telephone-related services such as international long-distance and wholesale services, data transmission and IT solutions outsourcing and install, operate and develop cable television and data transmission services. The company provides services in Argentina (mobile, cable television, Internet and fixed and data services), Paraguay (mobile, Internet and satellite TV services), Uruguay (cable television services) and the United States (fixed wholesale services).