AVITA Medical (AVITA Medical) ROC % : -463.64% (As of Mar. 2024)

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What is AVITA Medical 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 %. AVITA Medical's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -463.64%.

As of today (2024-05-29), AVITA Medical's WACC % is 17.70%. AVITA Medical's ROC % is -373.26% (calculated using TTM income statement data). AVITA Medical earns returns that do not match up to its cost of capital. It will destroy value as it grows.

AVITA Medical ROC % Historical Data

The historical data trend for AVITA Medical'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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AVITA Medical ROC % Chart

AVITA Medical Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Dec22

Dec23

ROC %

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-915.18

-1,268.07

-410.49

-272.87

-376.66

AVITA Medical Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															-308.28	-337.01	-319.36	-456.34	-463.64

AVITA Medical ROC % Calculation

AVITA Medical'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 )
=	-42.655 * ( 1 - -0.19% )	/	( (11.874	+	10.818)	/ 2 )
=	-42.7360445	/	11.346
=	-376.66 %

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	))
=	98.264	-	9.625	-	( 79.342	-	max(0, 10.693	-	87.458	+	79.342	))
=	11.874

	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	))
=	111.64	-	11.765	-	( 89.057	-	max(0, 13.199	-	104.006	+	89.057	))
=	10.818

AVITA Medical's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-68.824 * ( 1 - -0.16% )	/	( (10.818	+	18.918)	/ 2 )
=	-68.9341184	/	14.868
=	-463.64 %

where

	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	))
=	111.64	-	11.765	-	( 89.057	-	max(0, 13.199	-	104.006	+	89.057	))
=	10.818

	Invested Capital		(Q: Mar. 2024 )
=	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	))
=	97.381	-	10.28	-	( 68.183	-	max(0, 11.862	-	85.986	+	68.183	))
=	18.918

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

AVITA Medical (OTCPK:AVHHL) 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, AVITA Medical's WACC % is 17.70%. AVITA Medical's ROC % is -373.26% (calculated using TTM income statement data). AVITA Medical 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.

AVITA Medical ROC % Related Terms

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AVITA Medical (AVITA Medical) Business Description

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GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » AVITA Medical Inc (OTCPK:AVHHL) » Definitions » ROC %

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RCEL:USA 51KB:Germany AVH:Australia

Address

28159 Avenue Stanford, Suite 220, Valencia, Los Angeles, CA, USA, 91355

Website

https://www.avitamedical.com

Avita is a single product company. Its RECELL system is an innovative burn treatment device which creates Spray-on Skin from a small skin sample within 30 minutes, thus avoiding or reducing the need for skin grafts. It's approved for the treatment of adult patients in the U.S. with paediatric clinical trials and expanded indications in soft-tissue reconstruction and vitiligo underway. It is currently in roll-out across the approximately 136 U.S. burn centers. Despite having product approval in Australia, Europe, Canada, and China, Avita is not actively marketing in those territories and focussing instead on the U.S. region. However, it is expected to launch in Japan via distribution partner Cosmotec in second-half fiscal 2022. Avita is domiciled, and has its primary listing, in the U.S.