POWR Lithium (XCNQ:POWR) ROC % : -174.07% (As of Feb. 2024)

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What is POWR Lithium 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 %. POWR Lithium's annualized return on capital (ROC %) for the quarter that ended in Feb. 2024 was -174.07%.

As of today (2024-05-27), POWR Lithium's WACC % is 9.70%. POWR Lithium's ROC % is -139.54% (calculated using TTM income statement data). POWR Lithium earns returns that do not match up to its cost of capital. It will destroy value as it grows.

POWR Lithium ROC % Historical Data

The historical data trend for POWR Lithium'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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POWR Lithium ROC % Chart

POWR Lithium Annual Data

Trend

Aug21

Aug22

Aug23

ROC %

-47.67

-148.57

-90.27

POWR Lithium Quarterly Data
	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
ROC %	Get a 7-Day Free Trial							-163.49	-41.63	-56.38	-247.86	-174.07

POWR Lithium ROC % Calculation

POWR Lithium's annualized Return on Capital (ROC %) for the fiscal year that ended in Aug. 2023 is calculated as:

	ROC % (A: Aug. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Aug. 2022 )	+	Invested Capital (A: Aug. 2023 ))	/ count )
=	-1.94 * ( 1 - 0% )	/	( (1.876	+	2.422)	/ 2 )
=	-1.94	/	2.149
=	-90.27 %

where

	Invested Capital		(A: Aug. 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	))
=	2.499	-	0.178	-	( 0.445	-	max(0, 0.204	-	0.664	+	0.445	))
=	1.876

	Invested Capital		(A: Aug. 2023 )
=	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	))
=	2.575	-	0.642	-	( 0.075	-	max(0, 0.662	-	0.173	+	0.075	))
=	2.422

POWR Lithium's annualized Return on Capital (ROC %) for the quarter that ended in Feb. 2024 is calculated as:

	ROC % (Q: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Nov. 2023 )	+	Invested Capital (Q: Feb. 2024 ))	/ count )
=	-4.216 * ( 1 - 0% )	/	( (2.442	+	2.402)	/ 2 )
=	-4.216	/	2.422
=	-174.07 %

where

	Invested Capital		(Q: Nov. 2023 )
=	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	))
=	3.75	-	0.615	-	( 0.693	-	max(0, 0.615	-	1.348	+	0.693	))
=	2.442

	Invested Capital		(Q: Feb. 2024 )
=	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	))
=	2.749	-	0.228	-	( 0.12	-	max(0, 0.228	-	0.347	+	0.12	))
=	2.402

Note: The Operating Income data used here is four times the quarterly (Feb. 2024) data.

POWR Lithium (XCNQ:POWR) 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, POWR Lithium's WACC % is 9.70%. POWR Lithium's ROC % is -139.54% (calculated using TTM income statement data). POWR Lithium 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.

POWR Lithium ROC % Related Terms

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POWR Lithium (XCNQ:POWR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » POWR Lithium Corp (XCNQ:POWR) » Definitions » ROC %

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Traded in Other Exchanges

PWRLF:USA 6JX:Germany

Address

1021 West Hastings Street, 9th Floor, Vancouver, BC, CAN, V6E 0C3

Website

https://www.powrlithium.com

POWR Lithium Corp is a new mineral exploration and development company focused on American lithium deposits to support domestic demand. It is predominantly engaged in the business of mineral exploration and the development of the ELi Property and the Halo Project.

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