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Eton Pharmaceuticals (NAS:ETON) ROIC %

: -36.39% (As of Sep. 2023)
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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Eton Pharmaceuticals's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was -36.39%.

As of today (2024-02-25), Eton Pharmaceuticals's WACC % is 10.36%. Eton Pharmaceuticals's ROIC % is 30.98% (calculated using TTM income statement data). Eton Pharmaceuticals generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.


Eton Pharmaceuticals ROIC % Historical Data

The historical data trend for Eton Pharmaceuticals'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.

* Premium members only.

Eton Pharmaceuticals Annual Data
Trend Dec17 Dec18 Dec19 Dec20 Dec21 Dec22
ROIC %
Premium Member Only -2,114.96 -961.79 -1,097.39 -25.30 -103.39

Eton Pharmaceuticals Quarterly Data
Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -245.29 71.59 -166.06 252.80 -36.39

Competitive Comparison

For the Drug Manufacturers - Specialty & Generic subindustry, Eton Pharmaceuticals'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.


Eton Pharmaceuticals ROIC % Distribution

For the Drug Manufacturers industry and Healthcare sector, Eton Pharmaceuticals's ROIC % distribution charts can be found below:

* The bar in red indicates where Eton Pharmaceuticals's ROIC % falls into.



Eton Pharmaceuticals ROIC % Calculation

Eton Pharmaceuticals's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:

ROIC % (A: Dec. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2021 ) + Invested Capital (A: Dec. 2022 ))/ count )
=-8.26 * ( 1 - 0% )/( (9.919 + 6.059)/ 2 )
=-8.26/7.989
=-103.39 %

where

Eton Pharmaceuticals's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2023 is calculated as:

ROIC % (Q: Sep. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2023 ) + Invested Capital (Q: Sep. 2023 ))/ count )
=-2.192 * ( 1 - 0% )/( (6.139 + 5.909)/ 2 )
=-2.192/6.024
=-36.39 %

where

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

* 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.


Eton Pharmaceuticals  (NAS:ETON) 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, Eton Pharmaceuticals's WACC % is 10.36%. Eton Pharmaceuticals's ROIC % is 30.98% (calculated using TTM income statement data). Eton Pharmaceuticals generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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. Eton Pharmaceuticals 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 %, 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.


Eton Pharmaceuticals ROIC % Related Terms

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Eton Pharmaceuticals (NAS:ETON) Business Description

Traded in Other Exchanges
N/A
Address
21925 West Field Parkway, Suite 235, Deer Park, IL, USA, 60010-7278
Eton Pharmaceuticals Inc is a United States based specialty pharmaceutical company. The company is engaged in developing and commercializing pharmaceutical products to fulfill an unmet patient need. It has a diversified pipeline of around eleven product candidates in various stages of development.
Executives
David Krempa officer: Chief Business Officer 29125 W FIELD PARKWAY, SUITE 235, DEER PARK IL 60010
Sean Brynjelsen director, officer: President & CEO C/O ETON PHARMACEUTICALS, INC., 21925 W FIELD PKWY #235, DEER PARK IL 60010
James R. Gruber officer: Chief Financial Officer 618 AMES STREET, LIBERTYVILLE IL 60048
Opaleye Management Inc. 10 percent owner ONE BOSTON PLACE, SUITE 2600, BOSTON MA 02108
William Wilson Troutman officer: CFO, Treasurer & Secretary 21925 W FIELD PARKWAY, SUITE 235, DEER PARK IL 60010
Imprimis Pharmaceuticals, Inc. 10 percent owner 102 WOODMONT BLVD, SUITE 610, NASHVILLE TN 37215
Jennifer Mckie Adams director 5410 TENNESSEE AVE, NASHVILLE TN 37209
Charles J Casamento director 99 BELBROOK WAY, ATHERTON CA 94027
Norbert G Riedel director BAXTER INTERNATIONAL INC, ONE BAXTER PKWY DF2-1W, DEERFIELD IL 60015
Mark L Baum director C/O IMPRIMIS PHARMACEUTICALS, INC, 12264 EL CAMINO REAL, SUITE 350, SAN DIEGO CA 92130
Paul V Maier director 3595 JOHN HOPKINS COURT, SAN DIEGO CA 92121