Demand Brands (Demand Brands) ROC % : -0.30% (As of Jun. 2017)

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What is Demand Brands 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 %. Demand Brands's annualized return on capital (ROC %) for the quarter that ended in Jun. 2017 was -0.30%.

As of today (2024-05-04), Demand Brands's WACC % is 0.00%. Demand Brands's ROC % is 0.00% (calculated using TTM income statement data). Demand Brands earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Demand Brands ROC % Historical Data

The historical data trend for Demand Brands'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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Demand Brands ROC % Chart

Demand Brands Annual Data

Trend

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

ROC %

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-5.35

-4.32

-12.02

0.13

1.64

Demand Brands Quarterly Data
	Dec11	Dec12	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16	Mar17	Jun17
ROC %	Get a 7-Day Free Trial												1.05	1.66	2.88	0.77	-0.30

Demand Brands ROC % Calculation

Demand Brands's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2016 is calculated as:

	ROC % (A: Dec. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2015 )	+	Invested Capital (A: Dec. 2016 ))	/ count )
=	0.044 * ( 1 - 0% )	/	( (2.723	+	2.629)	/ 2 )
=	0.044	/	2.676
=	1.64 %

where

	Invested Capital		(A: Dec. 2015 )
=	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	))
=	2.761	-	0.013	-	( 0.046	-	max(0, 0.03	-	0.055	+	0.046	))
=	2.723

	Invested Capital		(A: Dec. 2016 )
=	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	))
=	2.683	-	0.012	-	( 0.042	-	max(0, 0.018	-	0.08	+	0.042	))
=	2.629

Demand Brands's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2017 is calculated as:

	ROC % (Q: Jun. 2017 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2017 )	+	Invested Capital (Q: Jun. 2017 ))	/ count )
=	-0.008 * ( 1 - 0% )	/	( (2.584	+	2.688)	/ 2 )
=	-0.008	/	2.636
=	-0.30 %

where

	Invested Capital		(Q: Mar. 2017 )
=	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	))
=	2.676	-	0.027	-	( 0.073	-	max(0, 0.032	-	0.097	+	0.073	))
=	2.584

	Invested Capital		(Q: Jun. 2017 )
=	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	))
=	2.746	-	0.034	-	( 0.051	-	max(0, 0.064	-	0.088	+	0.051	))
=	2.688

Note: The Operating Income data used here is four times the quarterly (Jun. 2017) data.

Demand Brands (OTCPK:DMAN) 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, Demand Brands's WACC % is 0.00%. Demand Brands's ROC % is 0.00% (calculated using TTM income statement data). Demand Brands 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.

Demand Brands ROC % Related Terms

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Demand Brands (Demand Brands) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Demand Brands Inc (OTCPK:DMAN) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

430 Westridge Dr, Watsonville, CA, USA, 95076

Website

https://www.dman.co

Demand Brands Inc is engaged in the business of developing opportunities in marketing, cultivating, developing and distributing cannabis and related products. The Company provides value and solutions through service contracts to cannabis businesses consisting of several, vertically integrated cannabis-related operating units including cultivation, processing, brand management as well as both wholesale and retail distribution.