ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Transition Therapeutics's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2016 was -145.05%.
As of today (2024-04-26), Transition Therapeutics's WACC % is 0.00%. Transition Therapeutics's ROIC % is 0.00% (calculated using TTM income statement data).
Transition Therapeutics earns returns that do not match up to its cost of capital. It will destroy value as it grows.
* 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.
Competitive Comparison of Transition Therapeutics's ROIC %
For the Biotechnology subindustry, Transition Therapeutics'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.
Transition Therapeutics's ROIC % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Transition Therapeutics's ROIC % distribution charts can be found below:
* The bar in red indicates where Transition Therapeutics's ROIC % falls into.
Transition Therapeutics ROIC % Calculation
Transition Therapeutics's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2015 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Mar. 2016) 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.
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, Transition Therapeutics's WACC % is 0.00%. Transition Therapeutics's ROIC % is 0.00% (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.
Transition Therapeutics ROIC % Related Terms
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Transition Therapeutics (Transition Therapeutics) Business Description
Transition Therapeutics Inc was incorporated on July 6, 1998 as 'Transition Therapeutics and Diagnostics Inc.' The Corporation filed articles of amendment on October 12, 2000 and on October 19, 2000 to create a class of non-voting shares (the 'Class B Shares') and to amend certain attributes of its Common Shares. On November 2, 2000, the Corporation filed articles of amendment to delete its private company restrictions. On December 14, 2000, the Corporation filed articles of amendment to change its name to 'Transition Therapeutics Inc.' The Company's technologies are focused on the treatment of Alzheimer's disease and diabetes. The Corporation operates in one business segment; that is the research and development of therapeutic agents. Its technologies in development include ELND005 (AZD-103) for the treatment of Alzheimer's disease. On April 30, 2013, the Company announced the results of a five-week proof of concept clinical study of TT401 in type 2 diabetic and obese non-diabetic subjects. In the study, TT401, a once weekly administered peptide, demonstrated improvements in glycemic control and reductions in body weight.
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