Legacy Minerals Holdings (ASX:LGM) ROIC % : -1.81% (As of Dec. 2023)

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What is Legacy Minerals Holdings ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Legacy Minerals Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -1.81%.

As of today (2024-04-24), Legacy Minerals Holdings's WACC % is 10.05%. Legacy Minerals Holdings's ROIC % is -14.49% (calculated using TTM income statement data). Legacy Minerals Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Legacy Minerals Holdings ROIC % Historical Data

The historical data trend for Legacy Minerals Holdings's ROIC % 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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Legacy Minerals Holdings ROIC % Chart

Legacy Minerals Holdings Annual Data

Trend

Jun22

Jun23

ROIC %

-93.72

-32.29

Legacy Minerals Holdings Semi-Annual Data
	Dec20	Dec21	Jun22	Dec22	Jun23	Dec23
ROIC %	Get a 7-Day Free Trial			-376.97	-58.40	-33.28	-32.44	-1.81

Competitive Comparison of Legacy Minerals Holdings's ROIC %

For the Other Industrial Metals & Mining subindustry, Legacy Minerals Holdings's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Legacy Minerals Holdings's ROIC % Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Legacy Minerals Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Legacy Minerals Holdings's ROIC % falls into.

Legacy Minerals Holdings ROIC % Calculation

Legacy Minerals Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROIC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	-1.009 * ( 1 - 0% )	/	( (2.212	+	4.037)	/ 2 )
=	-1.009	/	3.1245
=	-32.29 %

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	))
=	5.115	-	0.23	-	( 2.766	-	max(0, 0.255	-	2.928	+	2.766	))
=	2.212

	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	))
=	5.74	-	0.667	-	( 1.624	-	max(0, 0.713	-	1.749	+	1.624	))
=	4.037

Legacy Minerals Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-0.088 * ( 1 - 0% )	/	( (4.037	+	5.707)	/ 2 )
=	-0.088	/	4.872
=	-1.81 %

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	))
=	5.74	-	0.667	-	( 1.624	-	max(0, 0.713	-	1.749	+	1.624	))
=	4.037

	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	))
=	7.308	-	0	-	( 1.601	-	max(0, 0	-	2.66	+	1.601	))
=	5.707

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Legacy Minerals Holdings (ASX:LGM) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Legacy Minerals Holdings's WACC % is 10.05%. Legacy Minerals Holdings's ROIC % is -14.49% (calculated using TTM income statement data).

Be Aware

Like ROE % and ROA %, ROIC % 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.

Legacy Minerals Holdings ROIC % Related Terms

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Legacy Minerals Holdings (ASX:LGM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Legacy Minerals Holdings Ltd (ASX:LGM) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

401/54 Miller Street, North Sydney, NSW, AUS, 2060

Website

https://www.legacyminerals.com.au

Legacy Minerals Holdings Ltd is focused on gold and copper discovery. The company is involved in the acquisition and exploration of gold and copper projects in the prospective Lachlan Fold Belt (LFB) and New England Fold Belt (NEFB) of New South Wales (NSW). Its properties include Cobar, Harden, Rockley, Bauloora, Black range, and Fontenoy.

Legacy Minerals Holdings (ASX:LGM) Headlines

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