BlackBerry (TSX:BB) ROC %

: -6.09% (As of Feb. 2024)

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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 %. BlackBerry's annualized return on capital (ROC %) for the quarter that ended in Feb. 2024 was -6.09%.

As of today (2024-04-23), BlackBerry's WACC % is 10.52%. BlackBerry's ROC % is -6.27% (calculated using TTM income statement data). BlackBerry earns returns that do not match up to its cost of capital. It will destroy value as it grows.

BlackBerry ROC % Historical Data

The historical data trend for BlackBerry'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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BlackBerry Annual Data

Trend

Feb15

Feb16

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

Feb24

ROC %

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-5.73

-3.33

-7.06

-14.43

-6.80

BlackBerry Quarterly Data
	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
ROC %	Get a 7-Day Free Trial															-11.17	3.98	-14.21	-13.08	-6.09

BlackBerry ROC % Calculation

BlackBerry's annualized Return on Capital (ROC %) for the fiscal year that ended in Feb. 2024 is calculated as:

	ROC % (A: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Feb. 2023 )	+	Invested Capital (A: Feb. 2024 ))	/ count )
=	-97.2 * ( 1 - -22.64% )	/	( (2020.792	+	1486.35)	/ 2 )
=	-119.20608	/	1753.571
=	-6.80 %

where

	Invested Capital		(A: Feb. 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	))
=	2258.927	-	219.3	-	( 573.14	-	max(0, 980.797	-	999.632	+	573.14	))
=	2020.792

	Invested Capital		(A: Feb. 2024 )
=	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	))
=	1883.25	-	191.7	-	( 319.95	-	max(0, 480.6	-	685.8	+	319.95	))
=	1486.35

BlackBerry's annualized Return on Capital (ROC %) for the quarter that ended in Feb. 2024 is calculated as:

	ROC % (Q: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Nov. 2023 )	+	Invested Capital (Q: Feb. 2024 ))	/ count )
=	-91.8 * ( 1 - -7.69% )	/	( (1758.609	+	1486.35)	/ 2 )
=	-98.85942	/	1622.4795
=	-6.09 %

where

	Invested Capital		(Q: Nov. 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	))
=	1918.98	-	239.872	-	( 287.847	-	max(0, 696.316	-	616.815	+	287.847	))
=	1758.609

	Invested Capital		(Q: Feb. 2024 )
=	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	))
=	1883.25	-	191.7	-	( 319.95	-	max(0, 480.6	-	685.8	+	319.95	))
=	1486.35

Note: The Operating Income data used here is four times the quarterly (Feb. 2024) data.

BlackBerry (TSX:BB) 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, BlackBerry's WACC % is 10.52%. BlackBerry's ROC % is -6.27% (calculated using TTM income statement data). BlackBerry 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.

BlackBerry ROC % Related Terms

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BlackBerry (TSX:BB) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

BB:USA BB:Mexico RI1:Germany RI1:Germany RI1:Germany BBRY:Argentina

Address

2200 University Avenue East, Waterloo, ON, CAN, N2K 0A7

Website

https://www.blackberry.com

BlackBerry, once known for being the world's largest smartphone manufacturer, is now exclusively a software provider with a stated goal of end-to-end secure communication for enterprises. The firm provides endpoint management and protection to enterprises, specializing in regulated industries like government, as well as embedded software to the automotive, medical, and industrial markets.