Black Diamond Group (Black Diamond Group) ROC % : 7.47% (As of Dec. 2023)

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What is Black Diamond Group 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 %. Black Diamond Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 7.47%.

As of today (2024-04-30), Black Diamond Group's WACC % is 8.91%. Black Diamond Group's ROC % is 7.01% (calculated using TTM income statement data). Black Diamond Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Black Diamond Group ROC % Historical Data

The historical data trend for Black Diamond Group'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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Black Diamond Group ROC % Chart

Black Diamond Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-0.48

0.89

5.74

5.51

7.08

Black Diamond Group 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															5.96	4.56	5.08	10.84	7.47

Black Diamond Group ROC % Calculation

Black Diamond Group'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 )
=	40.482 * ( 1 - 22.4% )	/	( (442.91	+	444.316)	/ 2 )
=	31.414032	/	443.613
=	7.08 %

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	))
=	478.058	-	29.032	-	( 6.116	-	max(0, 50.924	-	73.133	+	6.116	))
=	442.91

	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	))
=	482.736	-	33.565	-	( 4.855	-	max(0, 57.793	-	63.384	+	4.855	))
=	444.316

Black Diamond Group'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 )
=	35.752 * ( 1 - 6.12% )	/	( (454.743	+	444.316)	/ 2 )
=	33.5639776	/	449.5295
=	7.47 %

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	))
=	494.657	-	35.755	-	( 4.159	-	max(0, 64.584	-	76.866	+	4.159	))
=	454.743

	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	))
=	482.736	-	33.565	-	( 4.855	-	max(0, 57.793	-	63.384	+	4.855	))
=	444.316

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

Black Diamond Group (OTCPK:BDIMF) 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, Black Diamond Group's WACC % is 8.91%. Black Diamond Group's ROC % is 7.01% (calculated using TTM income statement data). Black Diamond Group 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.

Black Diamond Group ROC % Related Terms

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Black Diamond Group (Black Diamond Group) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Black Diamond Group Ltd (OTCPK:BDIMF) » Definitions » ROC %

Comparable Companies

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8B8:Germany BDI:Canada

Address

440-2nd Avenue SW, Suite 1000, Calgary, AB, CAN, T2P 5E9

Website

https://www.blackdiamondgroup.com

Black Diamond Group Ltd rents and sells space rental solutions and modular workforce accommodations to business customers in Canada, the United States and Australia. It has two business units: Modular Space Solutions and Workforce Solutions. Modular Space Solutions provides high quality, cost effective, modular space rentals to customers. The customers operate in the construction, real estate development, education, manufacturing, health care, financial, government and defense industries. Workforce Solutions provides complete workforce housing solutions including rental of accommodations and surface equipment, provision of full turnkey lodge services and provision of travel management logistics through the Company's online digital marketplace, LodgeLink.