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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. ChannelAdvisor's annualized return on capital (ROC %) for the quarter that ended in Sep. 2022 was -0.28%.
As of today (2024-05-29), ChannelAdvisor's WACC % is 0.00%. ChannelAdvisor's ROC % is 0.00% (calculated using TTM income statement data). ChannelAdvisor earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for ChannelAdvisor'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.
ChannelAdvisor Annual Data | |||||||||||||||||||||
Trend | Dec12 | Dec13 | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | |||||||||||
ROC % | Get a 7-Day Free Trial | -23.10 | -10.40 | 3.69 | 19.70 | 43.17 |
ChannelAdvisor Quarterly Data | ||||||||||||||||||||
Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | |
ROC % | Get a 7-Day Free Trial | 13.89 | 129.53 | 5.76 | 5.57 | -0.28 |
ChannelAdvisor's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2021 is calculated as:
ROC % (A: Dec. 2021 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2020 ) | + | Invested Capital (A: Dec. 2021 )) | / count ) |
= | 18.928 * ( 1 - -161.36% ) | / | ( (99.385 | + | 129.795) | / 2 ) |
= | 49.4702208 | / | 114.59 | |||
= | 43.17 % |
where
Invested Capital | (A: Dec. 2020 ) | |||||||||||
= | 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 | )) |
= | 180.661 | - | 14.166 | - | ( 71.545 | - | max(0, 43.014 | - | 110.124 | + | 71.545 | )) |
= | 99.385 |
Invested Capital | (A: Dec. 2021 ) | |||||||||||
= | 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 | )) |
= | 239.972 | - | 14.101 | - | ( 100.567 | - | max(0, 48.874 | - | 144.95 | + | 100.567 | )) |
= | 129.795 |
ChannelAdvisor's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2022 is calculated as:
ROC % (Q: Sep. 2022 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Jun. 2022 ) | + | Invested Capital (Q: Sep. 2022 )) | / count ) |
= | 6.804 * ( 1 - 105.1% ) | / | ( (129.14 | + | 122.879) | / 2 ) |
= | -0.347004 | / | 126.0095 | |||
= | -0.28 % |
where
Invested Capital | (Q: 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 | )) |
= | 221.248 | - | 11.68 | - | ( 84.243 | - | max(0, 45.823 | - | 126.251 | + | 84.243 | )) |
= | 129.14 |
Invested Capital | (Q: Sep. 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 | )) |
= | 221.132 | - | 15.688 | - | ( 88.115 | - | max(0, 46.048 | - | 128.613 | + | 88.115 | )) |
= | 122.879 |
Note: The Operating Income data used here is four times the quarterly (Sep. 2022) 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.
ChannelAdvisor (NYSE:ECOM) 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, ChannelAdvisor's WACC % is 0.00%. ChannelAdvisor's ROC % is 0.00% (calculated using TTM income statement data). ChannelAdvisor 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.
Thank you for viewing the detailed overview of ChannelAdvisor's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
M Scot Wingo | director, officer: Chief Executive Officer | 3000 AERIAL CTR, STE 110, MORRISVILLE NC 27560 |
Timothy V Williams | director | 3100 MAIN STREET, STE 900, HOUSTON TX 77002 |
Himanshu Palsule | director | C/O CHANNELADVISOR, INC., 3025 CARRINGTON MILL BOULEVARD, MORRISVILLE NC 27560 |
Janet Raye Cowell | director | C/O COOLEY LLP, 11951 FREEDOM DRIVE, SUITE 1600, RESTON VA 20190 |
Linda M. Crawford | director | 3365 CLAY STREET, SAN FRANCISCO CA 94118 |
Joseph L Cowan | director | 9715 KEY WEST AVENUE, ROCKVILLE MD 20850 |
Marshall Heinberg | director | 1 CORPORATE AVENUE, ROWVILLE C3 3178 |
Elizabeth Segovia | officer: Chief Operating Officer | C/O CHANNELADVISOR CORPORATION, 3025 CARRINGTON MILL BOULEVARD, STE 500, MORRISVILLE VA 27560 |
Timothy Buckley | director | C/O RED HAT, INC, 1801 VARSITY DRIVE, RALEIGH NC 27606 |
David J Spitz | officer: President and COO | C/O CHANNELADVISOR CORPORATION, 2701 AERIAL CENTER PARKWAY, MORRISVILLE NC 27568 |
Marc Huffman | director | C/O NETSUITE INC., 2955 CAMPUS DRIVE, SUITE 100, SAN MATEO CA 94403 |
Richard Cornetta | officer: Chief Accounting Officer | C/O CHANNELADVISOR CORPORATION, 3025 CARRINGTON MILL BOULEVARD, MORRISVILLE NC 27560 |
Mark Cook | officer: Chief Financial Officer | C/O CHANNELADVISOR CORPORATION, 3025 CARRINGTON MILL BOULEVARD, RALEIGH NC 27601 |
Patrick J Kerins | director, 10 percent owner | |
Diana Semel Allen | officer: VP and General Counsel | C/O CHANNELADVISOR CORPORATION, 2701 AERIAL CENTER PARKWAY, MORRISVILLE NC 27560 |
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