Prospect Ridge Resources (XCNQ:PRR) ROC % : -28.72% (As of Feb. 2024)

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What is Prospect Ridge Resources 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 %. Prospect Ridge Resources's annualized return on capital (ROC %) for the quarter that ended in Feb. 2024 was -28.72%.

As of today (2024-06-04), Prospect Ridge Resources's WACC % is 13.64%. Prospect Ridge Resources's ROC % is -14.42% (calculated using TTM income statement data). Prospect Ridge Resources earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Prospect Ridge Resources ROC % Historical Data

The historical data trend for Prospect Ridge Resources'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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Prospect Ridge Resources ROC % Chart

Prospect Ridge Resources Annual Data

Trend

Aug20

Aug21

Aug22

Aug23

ROC %

-461.09

-135.69

-42.81

Prospect Ridge Resources Quarterly Data
	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	Aug23	Nov23	Feb24
ROC %	Get a 7-Day Free Trial								-58.73	-23.85	-	-28.96	-28.72

Prospect Ridge Resources ROC % Calculation

Prospect Ridge Resources'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 )
=	-2.256 * ( 1 - 0% )	/	( (5.201	+	5.339)	/ 2 )
=	-2.256	/	5.27
=	-42.81 %

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	))
=	8.661	-	0.292	-	( 3.168	-	max(0, 0.41	-	4.019	+	3.168	))
=	5.201

	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	))
=	7.013	-	0.28	-	( 1.394	-	max(0, 0.39	-	1.922	+	1.394	))
=	5.339

Prospect Ridge Resources'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 )
=	-1.572 * ( 1 - 0% )	/	( (5.544	+	5.403)	/ 2 )
=	-1.572	/	5.4735
=	-28.72 %

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	))
=	6.383	-	0.094	-	( 0.745	-	max(0, 0.181	-	1.336	+	0.745	))
=	5.544

	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	))
=	6	-	0.127	-	( 0.47	-	max(0, 0.216	-	0.996	+	0.47	))
=	5.403

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

Prospect Ridge Resources (XCNQ:PRR) 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, Prospect Ridge Resources's WACC % is 13.64%. Prospect Ridge Resources's ROC % is -14.42% (calculated using TTM income statement data). Prospect Ridge Resources 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.

Prospect Ridge Resources ROC % Related Terms

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Prospect Ridge Resources (XCNQ:PRR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Prospect Ridge Resources Corp (XCNQ:PRR) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

PRRSF:USA

Address

1030 West Georgia Street, Suite 1507, Vancouver, BC, CAN, V6E 2Y3

Website

https://www.prospectridgeresources.com

Prospect Ridge Resources Corp is a mineral exploration company engaged in the identification, acquisition, and exploration of mineral projects in North America. The company's material property is the Galinee Project, consisting of 15 contiguous mineral claims covering an area of approximately 839.45 hectares in the province of Quebec. It also holds interest in Holy Grail Property which is located north of Terrace, BC. It started the project Knauss Creek Property.

Executives

Michael Alexander Iverson	Director, Senior Officer
Yan Ducharme	Senior Officer

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