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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 %. LightPath Technologies's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -16.76%.
As of today (2024-04-29), LightPath Technologies's WACC % is 10.90%. LightPath Technologies's ROC % is -11.98% (calculated using TTM income statement data). LightPath Technologies earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for LightPath Technologies'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.
LightPath Technologies Annual Data | |||||||||||||||||||||
Trend | Jun14 | Jun15 | Jun16 | Jun17 | Jun18 | Jun19 | Jun20 | Jun21 | Jun22 | Jun23 | |||||||||||
ROC % | Get a 7-Day Free Trial | -3.98 | 2.97 | -6.66 | -8.60 | -9.22 |
LightPath Technologies Quarterly Data | ||||||||||||||||||||
Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
ROC % | Get a 7-Day Free Trial | -6.27 | -10.99 | -7.98 | -11.59 | -16.76 |
LightPath Technologies's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:
ROC % (A: Jun. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Jun. 2022 ) | + | Invested Capital (A: Jun. 2023 )) | / count ) |
= | -3.633 * ( 1 - -6.14% ) | / | ( (39.492 | + | 44.113) | / 2 ) |
= | -3.8560662 | / | 41.8025 | |||
= | -9.22 % |
where
Invested Capital | (A: Jun. 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 | )) |
= | 50.714 | - | 5.714 | - | ( 5.508 | - | max(0, 7.734 | - | 18.169 | + | 5.508 | )) |
= | 39.492 |
Invested Capital | (A: Jun. 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 | )) |
= | 53.536 | - | 4.736 | - | ( 4.687 | - | max(0, 6.834 | - | 21.76 | + | 4.687 | )) |
= | 44.113 |
LightPath Technologies's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:
ROC % (Q: Dec. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Sep. 2023 ) | + | Invested Capital (Q: Dec. 2023 )) | / count ) |
= | -7.132 * ( 1 - -4.64% ) | / | ( (44.87 | + | 44.182) | / 2 ) |
= | -7.4629248 | / | 44.526 | |||
= | -16.76 % |
where
Invested Capital | (Q: Sep. 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 | )) |
= | 55.313 | - | 6.126 | - | ( 4.317 | - | max(0, 8.524 | - | 19.973 | + | 4.317 | )) |
= | 44.87 |
Invested Capital | (Q: Dec. 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 | )) |
= | 54.065 | - | 6.346 | - | ( 3.537 | - | max(0, 9.726 | - | 18.781 | + | 3.537 | )) |
= | 44.182 |
Note: The Operating Income data used here is four times the quarterly (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.
LightPath Technologies (NAS:LPTH) 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, LightPath Technologies's WACC % is 10.90%. LightPath Technologies's ROC % is -11.98% (calculated using TTM income statement data). LightPath Technologies 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.
Thank you for viewing the detailed overview of LightPath Technologies's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Albert Miranda | officer: Chief Financial Officer | 1102 DUNCAN CR., UNIT 203, PALM BEACH GARDENS FL 33418 |
Shmuel Rubin | director, officer: Chief Executive Officer | 12619 OXON ROAD, HERNDON VA 20171-1707 |
Louis Leeburg | director | LIGHTPATH TECHNOLOGIES INC, 6820 ACEDEMY PKWY EAST NE, ALBUQUERQUE NM 87109 |
Darcie Peck | director | 2603 CHALLENGER TECH COURT, SUITE 100, ORLANDO FL 32826 |
Steven E Creviston | director | |
Retreage Donald O'connor Jr | officer: CFO | 2603 CHALLENGER TECH CT., SUITE 100, ORLANDO FL 32826 |
Brueck Steven R J | director | 2603 CHALLENGER TECH CT., SUITE 100, ., ORLANDO FL 32826 |
Robert Ripp | director | 920 ORCHID POINT WAY, VERO BEACH FL 32963 |
Gaynor Joseph J Jr | officer: VICE PRESIDENT | |
Joseph Menaker | director | 2603 CHALLENGER TECH CT., SUITE 100, ORLANDO FL 32826 |
Alan Symmons | officer: VP Engineering | 2603 CHALLENGER TECH CT, SUITE 100, ORLANDO FL 32826 |
Dorothy M Cipolla | officer: CFO & Secretary | 6848 STAPOINT CT, WINTER PARK FL 32792 |
Sohail A Khan | director | 1110 AMERICAN PARKWAY NE, ALLENTOWN PA 18109 |
Craig T Dunham | director | DYNASIL CORPORATION, 385 COOPER ROAD, WEST BERLIN NJ 08091 |
Xudong Zhu | director, 10 percent owner | 13 BUILDING, NO. 439, CHUNXIAO RD., ZHANGJIANG HIGH-TECH PARK, PUDONG, SHANGHAI F4 201203 |
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