Forma Therapeutics Holdings (Forma Therapeutics Holdings) ROIC % : -299.68% (As of Jun. 2022)

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What is Forma Therapeutics 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 %. Forma Therapeutics Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was -299.68%.

As of today (2024-05-11), Forma Therapeutics Holdings's WACC % is 7.81%. Forma Therapeutics Holdings's ROIC % is -254.80% (calculated using TTM income statement data). Forma Therapeutics Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Forma Therapeutics Holdings ROIC % Historical Data

The historical data trend for Forma Therapeutics 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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Forma Therapeutics Holdings ROIC % Chart

Forma Therapeutics Holdings Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

ROIC %

1.67

-28.29

-357.40

-280.68

Forma Therapeutics Holdings Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22
ROIC %	Get a 7-Day Free Trial										-239.23	-241.54	-237.29	-210.82	-299.68

Competitive Comparison of Forma Therapeutics Holdings's ROIC %

For the Biotechnology subindustry, Forma Therapeutics 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.

Forma Therapeutics Holdings's ROIC % Distribution in the Biotechnology Industry

For the Biotechnology industry and Healthcare sector, Forma Therapeutics Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Forma Therapeutics Holdings's ROIC % falls into.

Forma Therapeutics Holdings ROIC % Calculation

Forma Therapeutics Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:

	ROIC % (A: Dec. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2020 )	+	Invested Capital (A: Dec. 2021 ))	/ count )
=	-173.986 * ( 1 - -0.09% )	/	( (34.33	+	89.757)	/ 2 )
=	-174.1425874	/	62.0435
=	-280.68 %

where

	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	))
=	680.971	-	23.894	-	( 633.054	-	max(0, 31.7	-	654.447	+	633.054	))
=	34.33

	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	))
=	561.061	-	19.991	-	( 464.226	-	max(0, 35.088	-	486.401	+	464.226	))
=	89.757

Forma Therapeutics Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2022 is calculated as:

	ROIC % (Q: Jun. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2022 )	+	Invested Capital (Q: Jun. 2022 ))	/ count )
=	-211.992 * ( 1 - 0.02% )	/	( (78.782	+	62.667)	/ 2 )
=	-211.9496016	/	70.7245
=	-299.68 %

where

	Invested Capital		(Q: Mar. 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	))
=	514.497	-	15.527	-	( 421.358	-	max(0, 26.337	-	446.525	+	421.358	))
=	78.782

	Invested Capital		(Q: 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	))
=	475.169	-	19.52	-	( 395.903	-	max(0, 33.464	-	426.446	+	395.903	))
=	62.667

Note: The Operating Income data used here is four times the quarterly (Jun. 2022) data.

Forma Therapeutics Holdings (NAS:FMTX) 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, Forma Therapeutics Holdings's WACC % is 7.81%. Forma Therapeutics Holdings's ROIC % is -254.80% (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.

Forma Therapeutics Holdings ROIC % Related Terms

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Forma Therapeutics Holdings (Forma Therapeutics Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Forma Therapeutics Holdings Inc (NAS:FMTX) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

300 North Beacon Street, Suite 501, Watertown, MA, USA, 02472

Website

https://www.formatherapeutics.com

Forma Therapeutics Holdings Inc is a clinical-stage biopharmaceutical company. It is focused on the development and commercialization of novel therapeutics to transform the lives of patients with rare hematologic diseases and cancers. The firm's pipeline products are Etavopivat, FT-7051, FT-8225, and others.

Executives

Agustin Melian	officer: EVP, Research & Development	C/O ALLOVIR, INC., 139 MAIN STREET, SUITE 500, CAMBRIDGE MA 02142
Brian Andrew Lesser	officer: SVP, Commercial Officer	C/O FORMA THERAPEUTICS HOLDINGS, INC. 300 NORTH BEACON STREET SUITE 501 WATERTOWN MA 02472
Mary E. Wadlinger	officer: See Remarks	C/O FORMA THERAPEUTICS HOLDINGS, INC. 500 ARSENAL STREET, SUITE 100 WATERTOWN MA 02472
Jeannette Potts	officer: See Remarks	C/O FORMA THERAPEUTICS HOLDINGS, INC., 500 ARSENAL STREET, SUITE 100, WATERTOWN MA 02472
Frank D. Lee	director, officer: President and CEO	C/O FORMA THERAPEUTICS HOLDINGS, INC., 500 ARSENAL STREET, SUITE 100, WATERTOWN MA 02472
David N Cook	officer: SVP, Chief Scientific Officer
Patrick F. Kelly	officer: SVP, Chief Medical Officer	C/O FORMA THERAPEUTICS HOLDINGS, INC. 500 ARSENAL STREET, SUITE 100 WATERTOWN MA 02472
Todd Shegog	officer: SVP, Chief Financial Officer	200 SIDNEY STREET, SUITE 320, C/O SYNLOGIC, INC., CAMBRIDGE MA 02139
Arturo Md Molina	director	10990 WILSHIRE BLVD, SUITE 1200, LOS ANGELES CA 90024
John E Bishop	officer: Chief Technology Officer	675 WEST KENDALL STREET, CAMBRIDGE MA 02142
Vickers Selwyn M Md	director	600 NORTH 18TH STREET, BIRMINGHAM AL 35203
Thomas G Wiggans	director
Frederick Wayne A.i.	director	500 W MAIN ST., LOUISVILLE KY 40202
Peter Kolchinsky	director, 10 percent owner	200 BERKELEY STREET, 18TH FLOOR, BOSTON MA 02116
Ra Capital Healthcare Fund Lp	10 percent owner	200 BERKELEY STREET, 18TH FLOOR, BOSTON MA 02116