Arax Holdings (Arax Holdings) ROC %

: -91.64% (As of Jul. 2023)

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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Arax Holdings's annualized return on capital (ROC %) for the quarter that ended in Jul. 2023 was -91.64%.

As of today (2024-04-18), Arax Holdings's WACC % is -2.73%. Arax Holdings's ROC % is -47.12% (calculated using TTM income statement data). Arax Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Arax Holdings ROC % Historical Data

The historical data trend for Arax Holdings'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.

Arax Holdings Annual Data

Trend

Oct12

Oct13

Oct14

Oct15

Oct16

Oct20

Oct21

Oct22

ROC %

-217.88

-78.37

Arax Holdings Quarterly Data
	Oct15	Jan16	Apr16	Jul16	Oct16	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23
ROC %																-	-	4.71	-361.83	-91.64

Arax Holdings ROC % Calculation

Arax Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Oct. 2022 is calculated as:

	ROC % (A: Oct. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Oct. 2021 )	+	Invested Capital (A: Oct. 2022 ))	/ count )
=	-0.149 * ( 1 - 0% )	/	( (0	+	0)	/ 1 )
=	-0.149	/	0
=	%

where

	Invested Capital		(A: Oct. 2021 )
=	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	))
=	0	-	0.026	-	( 0	-	max(0, 0.026	-	0	+	0	))
=	0

	Invested Capital		(A: Oct. 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	))
=	0	-	0.175	-	( 0	-	max(0, 0.175	-	0	+	0	))
=	0

Arax Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Jul. 2023 is calculated as:

	ROC % (Q: Jul. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Apr. 2023 )	+	Invested Capital (Q: Jul. 2023 ))	/ count )
=	-9.344 * ( 1 - 0% )	/	( (0.894	+	19.498)	/ 2 )
=	-9.344	/	10.196
=	-91.64 %

where

	Invested Capital		(Q: Apr. 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	))
=	19.547	-	0.103	-	( 18.55	-	max(0, 0.438	-	19.547	+	18.55	))
=	0.894

	Invested Capital		(Q: Jul. 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	))
=	19.629	-	0.229	-	( 0	-	max(0, 0.229	-	0.131	+	0	))
=	19.498

Note: The Operating Income data used here is four times the quarterly (Jul. 2023) data.

Arax Holdings (OTCPK:ARAT) 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, Arax Holdings's WACC % is -2.73%. Arax Holdings's ROC % is -47.12% (calculated using TTM income statement data). Arax Holdings 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.

Arax Holdings ROC % Related Terms

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Arax Holdings (Arax Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Arax Holdings Corp (OTCPK:ARAT) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

30 North Gould Street, Sheridan, WY, USA, 82801

Website

https://www.arax.cc

Arax Holdings Corp invests in TechFin and blockchain-based software solutions companies. The primary focus of Arax is to fuse decentralized solutions with financial service providers within multiple markets and communication networks to bring blockchain to everyday life.

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