Azarga Uranium (TSX:AZZ) ROC % : -5.41% (As of Jun. 2021)

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What is Azarga Uranium 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 %. Azarga Uranium's annualized return on capital (ROC %) for the quarter that ended in Jun. 2021 was -5.41%.

As of today (2024-05-11), Azarga Uranium's WACC % is 11.36%. Azarga Uranium's ROC % is -3.90% (calculated using TTM income statement data). Azarga Uranium earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Azarga Uranium ROC % Historical Data

The historical data trend for Azarga Uranium'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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Azarga Uranium ROC % Chart

Azarga Uranium Annual Data

Trend

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

ROC %

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-4.29

-3.08

-5.63

-4.21

-3.96

Azarga Uranium Quarterly Data
	Sep16	Dec16	Mar17	Jun17	Sep17	Dec17	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21
ROC %	Get a 7-Day Free Trial															-4.24	-2.98	-3.95	-3.27	-5.41

Azarga Uranium ROC % Calculation

Azarga Uranium's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2020 is calculated as:

	ROC % (A: Dec. 2020 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2019 )	+	Invested Capital (A: Dec. 2020 ))	/ count )
=	-2.029 * ( 1 - -8.34% )	/	( (54.899	+	56.142)	/ 2 )
=	-2.1982186	/	55.5205
=	-3.96 %

where

	Invested Capital		(A: Dec. 2019 )
=	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	))
=	55.114	-	1.046	-	( 0.242	-	max(0, 1.105	-	0.274	+	0.242	))
=	54.899

	Invested Capital		(A: Dec. 2020 )
=	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	))
=	59.143	-	0.674	-	( 3.074	-	max(0, 0.824	-	3.151	+	3.074	))
=	56.142

Azarga Uranium's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2021 is calculated as:

	ROC % (Q: Jun. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2021 )	+	Invested Capital (Q: Jun. 2021 ))	/ count )
=	-2.952 * ( 1 - 0% )	/	( (55.34	+	53.813)	/ 2 )
=	-2.952	/	54.5765
=	-5.41 %

where

	Invested Capital		(Q: Mar. 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	))
=	57.488	-	0.426	-	( 2.159	-	max(0, 0.573	-	2.295	+	2.159	))
=	55.34

	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	))
=	55.775	-	0.522	-	( 1.865	-	max(0, 0.541	-	1.981	+	1.865	))
=	53.813

Note: The Operating Income data used here is four times the quarterly (Jun. 2021) data.

Azarga Uranium (TSX:AZZ) 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, Azarga Uranium's WACC % is 11.36%. Azarga Uranium's ROC % is -3.90% (calculated using TTM income statement data). Azarga Uranium 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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Azarga Uranium (TSX:AZZ) Business Description

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GURUFOCUS.COM » STOCK LIST » Energy » Other Energy Sources » Azarga Uranium Corp (TSX:AZZ) » Definitions » ROC %

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Address

Unit 1 - 15782 Marine Drive, White Rock, BC, CAN, V4B 1E6

Website

http://www.azargauranium.com

Azarga Uranium Corp is an integrated uranium exploration and development company. It is an exploration and development stage company. The company controls uranium properties located in the United States of America (USA) with a primary focus on developing in-situ recovery uranium project. Its Dewey Burdock Project, located in South Dakota, USA, is the company's initial development priority. The company also owns uranium projects in Wyoming, Colorado, and Utah.