BEACN Wizardry & Magic (TSXV:BECN) ROC % : -87.36% (As of Sep. 2023)

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What is BEACN Wizardry & Magic 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 %. BEACN Wizardry & Magic's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was -87.36%.

As of today (2024-04-30), BEACN Wizardry & Magic's WACC % is 14.04%. BEACN Wizardry & Magic's ROC % is -86.32% (calculated using TTM income statement data). BEACN Wizardry & Magic earns returns that do not match up to its cost of capital. It will destroy value as it grows.

BEACN Wizardry & Magic ROC % Historical Data

The historical data trend for BEACN Wizardry & Magic'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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BEACN Wizardry & Magic ROC % Chart

BEACN Wizardry & Magic Annual Data

Trend

Dec20

Dec21

Dec22

ROC %

-304.32

-38.52

BEACN Wizardry & Magic Quarterly Data
	Nov20	Feb21	May21	Aug21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23
ROC %	Get a 7-Day Free Trial							-21.04	-110.20	-72.23	-73.97	-87.36

BEACN Wizardry & Magic ROC % Calculation

BEACN Wizardry & Magic's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	-0.725 * ( 1 - 0% )	/	( (1.015	+	2.749)	/ 2 )
=	-0.725	/	1.882
=	-38.52 %

where

	Invested Capital		(A: Dec. 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	))
=	3.364	-	0.309	-	( 2.04	-	max(0, 0.309	-	3.042	+	2.04	))
=	1.015

	Invested Capital		(A: Dec. 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	))
=	4.457	-	0.421	-	( 1.287	-	max(0, 0.689	-	4.144	+	1.287	))
=	2.749

BEACN Wizardry & Magic's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-2.468 * ( 1 - 0% )	/	( (2.95	+	2.7)	/ 2 )
=	-2.468	/	2.825
=	-87.36 %

where

	Invested Capital		(Q: 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	))
=	3.335	-	0.191	-	( 0.194	-	max(0, 0.453	-	2.991	+	0.194	))
=	2.95

	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	))
=	3.383	-	0.252	-	( 0.431	-	max(0, 0.259	-	3.061	+	0.431	))
=	2.7

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) data.

BEACN Wizardry & Magic (TSXV:BECN) 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, BEACN Wizardry & Magic's WACC % is 14.04%. BEACN Wizardry & Magic's ROC % is -86.32% (calculated using TTM income statement data). BEACN Wizardry & Magic 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.

BEACN Wizardry & Magic ROC % Related Terms

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BEACN Wizardry & Magic (TSXV:BECN) Business Description

Industry

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Address

3450 Uptown Boulevard, Suite 301, Victoria, BC, CAN, V8Z 0B9

Website

BEACN Wizardry & Magic Inc develops innovative audio equipment, peripherals, and technology for gamers, live streamers, and content creators. The group delivers premium products that produce studio-quality content. Its product portfolio consists of Beacn Mic, Beacn Mix, and?Beacn Mix Create. The group has two reportable geographic segments namely North America and Other.