NextGen Acquisition II (NextGen Acquisition II) ROC %

: -0.34% (As of Sep. 2021)

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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 %. NextGen Acquisition II's annualized return on capital (ROC %) for the quarter that ended in Sep. 2021 was -0.34%.

As of today (2024-04-19), NextGen Acquisition II's WACC % is 0.00%. NextGen Acquisition II's ROC % is -0.86% (calculated using TTM income statement data). NextGen Acquisition II earns returns that do not match up to its cost of capital. It will destroy value as it grows.

NextGen Acquisition II ROC % Historical Data

The historical data trend for NextGen Acquisition II'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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NextGen Acquisition II Annual Data

Trend

ROC %

NextGen Acquisition II Semi-Annual Data
	Jan21	Mar21	Jun21	Sep21
ROC %	-	-0.25	-0.25	-0.34

NextGen Acquisition II ROC % Calculation

NextGen Acquisition II's annualized Return on Capital (ROC %) for the fiscal year that ended in . 20 is calculated as:

	ROC % (A: . 20 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: . 20 )	+	Invested Capital (A: . 20 ))	/ count )
=	* ( 1 - % )	/	( (	+	)	/ )
=		/
=	%

where

Invested Capital

(A: . 20 )

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

))

(

max(0,

))

Invested Capital

(A: . 20 )

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

))

(

max(0,

))

NextGen Acquisition II's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2021 is calculated as:

	ROC % (Q: Sep. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2021 )	+	Invested Capital (Q: Sep. 2021 ))	/ count )
=	-1.296 * ( 1 - 0% )	/	( (383.098	+	383.384)	/ 2 )
=	-1.296	/	383.241
=	-0.34 %

where

	Invested Capital		(Q: Jun. 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	))
=	383.961	-	0.428	-	( 0.435	-	max(0, 0.428	-	1.352	+	0.435	))
=	383.098

	Invested Capital		(Q: Sep. 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	))
=	383.4	-	0.388	-	( 0.003	-	max(0, 1.158	-	0.786	+	0.003	))
=	383.384

Note: The Operating Income data used here is one times the annual (Sep. 2021) data.

NextGen Acquisition II (NAS:NGCAW) 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, NextGen Acquisition II's WACC % is 0.00%. NextGen Acquisition II's ROC % is -0.86% (calculated using TTM income statement data). NextGen Acquisition II 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.

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