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Richmond Vanadium Technology (ASX:RVT) ROIC % : -8.91% (As of Dec. 2023)


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What is Richmond Vanadium Technology ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Richmond Vanadium Technology's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -8.91%.

As of today (2024-05-20), Richmond Vanadium Technology's WACC % is 10.27%. Richmond Vanadium Technology's ROIC % is -9.19% (calculated using TTM income statement data). Richmond Vanadium Technology earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Richmond Vanadium Technology ROIC % Historical Data

The historical data trend for Richmond Vanadium Technology's ROIC % 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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Richmond Vanadium Technology ROIC % Chart

Richmond Vanadium Technology Annual Data
Trend Jun22 Jun23
ROIC %
- -13.20

Richmond Vanadium Technology Semi-Annual Data
Dec22 Jun23 Dec23
ROIC % -19.57 -9.43 -8.91

Competitive Comparison of Richmond Vanadium Technology's ROIC %

For the Other Industrial Metals & Mining subindustry, Richmond Vanadium Technology's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Richmond Vanadium Technology's ROIC % Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Richmond Vanadium Technology's ROIC % distribution charts can be found below:

* The bar in red indicates where Richmond Vanadium Technology's ROIC % falls into.



Richmond Vanadium Technology ROIC % Calculation

Richmond Vanadium Technology's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2023 is calculated as:

ROIC % (A: Jun. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Jun. 2022 ) + Invested Capital (A: Jun. 2023 ))/ count )
=-3.922 * ( 1 - 0% )/( (29.295 + 30.118)/ 2 )
=-3.922/29.7065
=-13.20 %

where

Richmond Vanadium Technology's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

ROIC % (Q: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2023 ) + Invested Capital (Q: Dec. 2023 ))/ count )
=-2.792 * ( 1 - 0% )/( (30.118 + 32.587)/ 2 )
=-2.792/31.3525
=-8.91 %

where

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) 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.


Richmond Vanadium Technology  (ASX:RVT) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Richmond Vanadium Technology's WACC % is 10.27%. Richmond Vanadium Technology's ROIC % is -9.19% (calculated using TTM income statement data).


Be Aware

Like ROE % and ROA %, ROIC % 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.


Richmond Vanadium Technology ROIC % Related Terms

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Richmond Vanadium Technology (ASX:RVT) Business Description

Traded in Other Exchanges
N/A
Address
251 Adelaide Terrace, Level 11, Perth, WA, AUS, 6000
Richmond Vanadium Technology Ltd is an Australian minerals exploration company advancing its Richmond Vanadium Project in north Queensland. The Richmond-Julia Creek Vanadium Project is the non-titanomagnetite vanadium deposit of its kind (soft marine sediments) globally and can produce a supply of vanadium for the steel and emerging energy storage markets. The project involves the development of an open cut, free dig vanadium mining operation producing vanadium pentoxide (V2O5) concentrate from the ore reserve.