Avatar Ventures (Avatar Ventures) ROC % : -6.67% (As of Apr. 2012)

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What is Avatar Ventures 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 %. Avatar Ventures's annualized return on capital (ROC %) for the quarter that ended in Apr. 2012 was -6.67%.

As of today (2024-04-27), Avatar Ventures's WACC % is 0.00%. Avatar Ventures's ROC % is 0.00% (calculated using TTM income statement data). Avatar Ventures earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Avatar Ventures ROC % Historical Data

The historical data trend for Avatar Ventures'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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Avatar Ventures ROC % Chart

Avatar Ventures Annual Data

Trend

Jul08

Jul09

Jul10

Jul11

ROC %

-450.00

-60.87

-46.67

-569.23

Avatar Ventures Quarterly Data
	Oct07	Jan08	Apr08	Jul08	Oct08	Jan09	Apr09	Jul09	Oct09	Jan10	Apr10	Jul10	Oct10	Jan11	Apr11	Jul11	Oct11	Jan12	Apr12
ROC %	Get a 7-Day Free Trial														-57.14	-2,197.47	-267.84	-106.52	-6.67

Avatar Ventures ROC % Calculation

Avatar Ventures's annualized Return on Capital (ROC %) for the fiscal year that ended in Jul. 2011 is calculated as:

	ROC % (A: Jul. 2011 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jul. 2010 )	+	Invested Capital (A: Jul. 2011 ))	/ count )
=	-0.222 * ( 1 - 0% )	/	( (0	+	0.039)	/ 1 )
=	-0.222	/	0.039
=	-569.23 %

where

	Invested Capital		(A: Jul. 2010 )
=	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	-	0.022	-	( 0	-	max(0, 0.022	-	0	+	0	))
=	0

	Invested Capital		(A: Jul. 2011 )
=	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	))
=	0.288	-	0.031	-	( 0.218	-	max(0, 0.031	-	0.288	+	0.218	))
=	0.039

Avatar Ventures's annualized Return on Capital (ROC %) for the quarter that ended in Apr. 2012 is calculated as:

	ROC % (Q: Apr. 2012 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jan. 2012 )	+	Invested Capital (Q: Apr. 2012 ))	/ count )
=	-0.012 * ( 1 - 0% )	/	( (0.18	+	0.18)	/ 2 )
=	-0.012	/	0.18
=	-6.67 %

where

	Invested Capital		(Q: Jan. 2012 )
=	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	))
=	0.242	-	0.06	-	( 0.002	-	max(0, 0.06	-	0.134	+	0.002	))
=	0.18

	Invested Capital		(Q: Apr. 2012 )
=	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	))
=	0.241	-	0.061	-	( 0	-	max(0, 0.061	-	0.07	+	0	))
=	0.18

Note: The Operating Income data used here is four times the quarterly (Apr. 2012) data.

Avatar Ventures (GREY:ATAR) 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, Avatar Ventures's WACC % is 0.00%. Avatar Ventures's ROC % is 0.00% (calculated using TTM income statement data). Avatar Ventures 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.

Avatar Ventures ROC % Related Terms

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Avatar Ventures (Avatar Ventures) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Avatar Ventures Corp (GREY:ATAR) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

27281 Las Ramblas, Suite 200, Mission Viejo, CA, USA, 92691

Website

http://www.avatarventurescorp.com

Avatar Ventures Corp intends to be a developer of aftermarket electronic accessories for consumer motor vehicles.

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