Gamesquare Esports (XCNQ:GSQ) ROC % : -109.15% (As of Sep. 2022)

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What is Gamesquare Esports 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 %. Gamesquare Esports's annualized return on capital (ROC %) for the quarter that ended in Sep. 2022 was -109.15%.

As of today (2024-06-06), Gamesquare Esports's WACC % is 5.85%. Gamesquare Esports's ROC % is -66.71% (calculated using TTM income statement data). Gamesquare Esports earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Gamesquare Esports ROC % Historical Data

The historical data trend for Gamesquare Esports'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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Gamesquare Esports ROC % Chart

Gamesquare Esports Annual Data

Trend

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

ROC %

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112.10

-36.51

-31.36

-62.86

-44.54

Gamesquare Esports Quarterly Data
	Jun17	Sep17	Dec17	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Feb21	May21	Aug21	Mar22	Jun22	Sep22
ROC %	Get a 7-Day Free Trial															-533.68	-199.02	-66.26	-59.81	-109.15

Gamesquare Esports ROC % Calculation

Gamesquare Esports's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2019 is calculated as:

	ROC % (A: Dec. 2019 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2018 )	+	Invested Capital (A: Dec. 2019 ))	/ count )
=	-0.917 * ( 1 - 0% )	/	( (2.098	+	2.02)	/ 2 )
=	-0.917	/	2.059
=	-44.54 %

where

	Invested Capital		(A: Dec. 2018 )
=	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	))
=	3.778	-	0.132	-	( 1.95	-	max(0, 0.446	-	1.994	+	1.95	))
=	2.098

	Invested Capital		(A: Dec. 2019 )
=	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	))
=	2.813	-	0.112	-	( 1.06	-	max(0, 0.432	-	1.113	+	1.06	))
=	2.02

Gamesquare Esports'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 )
=	-21.86 * ( 1 - 0.43% )	/	( (21.006	+	18.875)	/ 2 )
=	-21.766002	/	19.9405
=	-109.15 %

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	))
=	28.408	-	3.539	-	( 3.863	-	max(0, 6.385	-	12.195	+	3.863	))
=	21.006

	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	))
=	32.263	-	8.022	-	( 5.366	-	max(0, 10.086	-	17.21	+	5.366	))
=	18.875

Note: The Operating Income data used here is four times the quarterly (Sep. 2022) data.

Gamesquare Esports (XCNQ:GSQ) 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, Gamesquare Esports's WACC % is 5.85%. Gamesquare Esports's ROC % is -66.71% (calculated using TTM income statement data). Gamesquare Esports 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.

Gamesquare Esports ROC % Related Terms

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Gamesquare Esports (XCNQ:GSQ) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » Gamesquare Esports Inc (XCNQ:GSQ) » Definitions » ROC %

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Address

150 York Street, Suite 1008, Toronto, ON, CAN, M5H 3S5

Website

https://www.gamesquare.com

Gamesquare Esports Inc is an international esports company. It is seeking to acquire additional assets and entities serving the esports market and, more broadly, in sports and entertainment. The company's acquisition of Code Red, an esports talent agency, provided an initial foothold in Europe through its UK operations.The business is comprised of two operating segments: teams and agency services. The company's teams segment represents its esports teams, which generate revenue through sponsorship, prize, and player-related revenue. The company's agencies generate revenue through talent management, influencer promotional fees, and consulting.

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