RegTech Open Project (LSE:RTOP) ROC % : -21.17% (As of Dec. 2022)

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What is RegTech Open Project 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 %. RegTech Open Project's annualized return on capital (ROC %) for the quarter that ended in Dec. 2022 was -21.17%.

As of today (2024-06-08), RegTech Open Project's WACC % is 3.45%. RegTech Open Project's ROC % is -21.17% (calculated using TTM income statement data). RegTech Open Project earns returns that do not match up to its cost of capital. It will destroy value as it grows.

RegTech Open Project ROC % Historical Data

The historical data trend for RegTech Open Project'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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RegTech Open Project ROC % Chart

RegTech Open Project Annual Data

Trend

Dec20

Dec21

ROC %

-16.67

-11.33

RegTech Open Project Semi-Annual Data
	Dec20	Dec21	Dec22
ROC %	-16.67	-11.33	-21.17

RegTech Open Project ROC % Calculation

RegTech Open Project'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 )
=	-0.919 * ( 1 - 30.22% )	/	( (4.832	+	6.486)	/ 2 )
=	-0.6412782	/	5.659
=	-11.33 %

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	))
=	4.211	-	2.357	-	( 0.002	-	max(0, 4.209	-	1.231	+	0.002	))
=	4.832

	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	))
=	5.298	-	3.189	-	( 0.143	-	max(0, 5.931	-	1.554	+	0.143	))
=	6.486

RegTech Open Project's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2022 is calculated as:

	ROC % (Q: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2021 )	+	Invested Capital (Q: Dec. 2022 ))	/ count )
=	-1.954 * ( 1 - 25.24% )	/	( (6.486	+	7.318)	/ 2 )
=	-1.4608104	/	6.902
=	-21.17 %

where

	Invested Capital		(Q: 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	))
=	5.298	-	3.189	-	( 0.143	-	max(0, 5.931	-	1.554	+	0.143	))
=	6.486

	Invested Capital		(Q: 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	))
=	4.789	-	3.721	-	( 0.003	-	max(0, 6.98	-	0.73	+	0.003	))
=	7.318

Note: The Operating Income data used here is one times the annual (Dec. 2022) data.

RegTech Open Project (LSE:RTOP) 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, RegTech Open Project's WACC % is 3.45%. RegTech Open Project's ROC % is -21.17% (calculated using TTM income statement data). RegTech Open Project 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.

RegTech Open Project ROC % Related Terms

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RegTech Open Project (LSE:RTOP) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » RegTech Open Project plc (LSE:RTOP) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

RM1:Germany

Address

107 Cheapside, 9th Floor, London, GBR, EC2V 6DN

Website

https://www.regtechopenproject.co.uk

RegTech Open Project plc is a technology business specialized in regtech that has developed the Orbit Open Platform, an award-winning proprietary software platform focused on OR, which helps its customers navigate an increasingly complex regulatory landscape, maintain a secure and stable operating environment, whilst improving compliance with applicable regulations and standards and reducing the risk of business disruptions. The Orbit Open Platform is a cloud-based SaaS solution that offers a suite of modules and features enabling businesses to achieve OR more efficiently and effectively. By leveraging the cloud, the Orbit Open Platform is able to offer flexibility, scalability, and easy access for businesses of all sizes, sectors and geographies.

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