Mad Paws Holdings (ASX:MPA) ROC % : -17.41% (As of Dec. 2023)

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What is Mad Paws Holdings 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 %. Mad Paws Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -17.41%.

As of today (2024-06-03), Mad Paws Holdings's WACC % is 8.34%. Mad Paws Holdings's ROC % is -22.91% (calculated using TTM income statement data). Mad Paws Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Mad Paws Holdings ROC % Historical Data

The historical data trend for Mad Paws Holdings'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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Mad Paws Holdings ROC % Chart

Mad Paws Holdings Annual Data

Trend

Jun20

Jun21

Jun22

Jun23

ROC %

-364.32

-67.03

-29.60

Mad Paws Holdings Semi-Annual Data
	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial			-168.04	-63.41	-30.01	-28.68	-17.41

Mad Paws Holdings ROC % Calculation

Mad Paws Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	-8.947 * ( 1 - 3.25% )	/	( (27.4	+	31.085)	/ 2 )
=	-8.6562225	/	29.2425
=	-29.60 %

where

	Invested Capital		(A: Jun. 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	))
=	30.918	-	4.126	-	( 5.562	-	max(0, 8.027	-	7.419	+	5.562	))
=	27.4

	Invested Capital		(A: Jun. 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	))
=	31.879	-	4.353	-	( 3.087	-	max(0, 9.054	-	5.495	+	3.087	))
=	31.085

Mad Paws Holdings'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: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-5.862 * ( 1 - 5.46% )	/	( (31.085	+	32.587)	/ 2 )
=	-5.5419348	/	31.836
=	-17.41 %

where

	Invested Capital		(Q: Jun. 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	))
=	31.879	-	4.353	-	( 3.087	-	max(0, 9.054	-	5.495	+	3.087	))
=	31.085

	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	))
=	32.629	-	5.028	-	( 3.581	-	max(0, 11.588	-	6.602	+	3.581	))
=	32.587

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Mad Paws Holdings (ASX:MPA) 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, Mad Paws Holdings's WACC % is 8.34%. Mad Paws Holdings's ROC % is -22.91% (calculated using TTM income statement data). Mad Paws Holdings 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.

Mad Paws Holdings ROC % Related Terms

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Mad Paws Holdings (ASX:MPA) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Personal Services » Mad Paws Holdings Ltd (ASX:MPA) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

126-130 Phillip Street, Level 5, Sydney, NSW, AUS, 2000

Website

https://www.madpaws.com.au

Mad Paws Holdings Ltd is an Australian-based pet services business whose primary activity is the operation of a pet care services online marketplace. The Mad Paws marketplace matches and connects pet owners seeking pet care services, such as pet sitting, walking, daycare, and grooming, with pet sitters, walkers, and other pet service providers registered on the marketplace. The company operates in two segments, marketplace, and E-commerce & subscription. The majority of revenue is derived from e-commerce & subscription segments.