GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Velocity Energy Inc. (OTCPK:VCYE) » Definitions » ROC %

Velocity Energy (Velocity Energy) ROC % : -27.64% (As of Jun. 2009)


View and export this data going back to . Start your Free Trial

What is Velocity Energy 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 %. Velocity Energy's annualized return on capital (ROC %) for the quarter that ended in Jun. 2009 was -27.64%.

As of today (2024-05-14), Velocity Energy's WACC % is 0.00%. Velocity Energy's ROC % is 0.00% (calculated using TTM income statement data). Velocity Energy earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Velocity Energy ROC % Historical Data

The historical data trend for Velocity Energy'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.

* Premium members only.

Velocity Energy ROC % Chart

Velocity Energy Annual Data
Trend Dec05 Dec06 Dec07 Dec08
ROC %
-196.84 -337.37 -9.68 -39.56

Velocity Energy Quarterly Data
Dec05 Mar06 Jun06 Sep06 Dec06 Mar07 Jun07 Sep07 Dec07 Mar08 Jun08 Sep08 Dec08 Mar09 Jun09
ROC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.64 -67.27 -64.11 -48.57 -27.64

Velocity Energy ROC % Calculation

Velocity Energy's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2008 is calculated as:

ROC % (A: Dec. 2008 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2007 ) + Invested Capital (A: Dec. 2008 ))/ count )
=-3.534 * ( 1 - 0% )/( (7.359 + 10.507)/ 2 )
=-3.534/8.933
=-39.56 %

where

Velocity Energy's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2009 is calculated as:

ROC % (Q: Jun. 2009 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2009 ) + Invested Capital (Q: Jun. 2009 ))/ count )
=-3.628 * ( 1 - 0% )/( (8.219 + 18.036)/ 2 )
=-3.628/13.1275
=-27.64 %

where

Note: The Operating Income data used here is four times the quarterly (Jun. 2009) 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.


Velocity Energy  (OTCPK:VCYE) 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, Velocity Energy's WACC % is 0.00%. Velocity Energy's ROC % is 0.00% (calculated using TTM income statement data). Velocity Energy 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.


Velocity Energy ROC % Related Terms

Thank you for viewing the detailed overview of Velocity Energy's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.


Velocity Energy (Velocity Energy) Business Description

Traded in Other Exchanges
N/A
Address
523 North Sam Houston Parkway East, Suite 175, Houston, TX, USA, 77060
Velocity Energy Inc is an oil and gas exploration and production company. It is engaged in the acquisition, development, exploration and production of natural gas and oil.
Executives
Michael J Pawelek director, officer: President and CEO 300 EAST SONTERRA BLVD. STE 1220 SAN ANTONIO TX 78258
Peter Benz 10 percent owner 171 MADISON AVE., 17 FL.,, NEW YORK NY 10016
Longview Fund Lp 10 percent owner VIKING ASSET MANAGEMENT LLC, 66 BOVET ROAD, SUITE 320, SAN MATEO, CA 94402
Howard J Taylor director, 10 percent owner, officer: CEO STE. 194 48 PAR LA VILLE RD HAMILTON D0 HM11

Velocity Energy (Velocity Energy) Headlines

No Headlines