Rocky Mountain Chocolate Factory (Rocky Mountain Chocolate Factory) ROIC % : -23.20% (As of Nov. 2023)

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What is Rocky Mountain Chocolate Factory 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 %. Rocky Mountain Chocolate Factory's annualized return on invested capital (ROIC %) for the quarter that ended in Nov. 2023 was -23.20%.

As of today (2024-04-26), Rocky Mountain Chocolate Factory's WACC % is 8.64%. Rocky Mountain Chocolate Factory's ROIC % is -37.03% (calculated using TTM income statement data). Rocky Mountain Chocolate Factory earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Rocky Mountain Chocolate Factory ROIC % Historical Data

The historical data trend for Rocky Mountain Chocolate Factory'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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Rocky Mountain Chocolate Factory ROIC % Chart

Rocky Mountain Chocolate Factory Annual Data

Trend

Feb14

Feb15

Feb16

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

ROIC %

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12.95

5.56

-5.27

-4.13

-37.41

Rocky Mountain Chocolate Factory Quarterly Data
	Feb19	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23
ROIC %	Get a 7-Day Free Trial															-4.97	-48.10	-46.88	-32.65	-23.20

Competitive Comparison of Rocky Mountain Chocolate Factory's ROIC %

For the Confectioners subindustry, Rocky Mountain Chocolate Factory'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.

Rocky Mountain Chocolate Factory's ROIC % Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, Rocky Mountain Chocolate Factory's ROIC % distribution charts can be found below:

* The bar in red indicates where Rocky Mountain Chocolate Factory's ROIC % falls into.

Rocky Mountain Chocolate Factory ROIC % Calculation

Rocky Mountain Chocolate Factory's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Feb. 2023 is calculated as:

	ROIC % (A: Feb. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Feb. 2022 )	+	Invested Capital (A: Feb. 2023 ))	/ count )
=	-4.891 * ( 1 - -12.59% )	/	( (15.498	+	13.939)	/ 2 )
=	-5.5067769	/	14.7185
=	-37.41 %

where

	Invested Capital		(A: Feb. 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	))
=	26.881	-	3.796	-	( 7.587	-	max(0, 5.312	-	14.998	+	7.587	))
=	15.498

	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	))
=	21.987	-	3.331	-	( 4.717	-	max(0, 5.01	-	11.205	+	4.717	))
=	13.939

Rocky Mountain Chocolate Factory's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Nov. 2023 is calculated as:

	ROIC % (Q: Nov. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Aug. 2023 )	+	Invested Capital (Q: Nov. 2023 ))	/ count )
=	-3.1 * ( 1 - 0% )	/	( (12.416	+	14.312)	/ 2 )
=	-3.1	/	13.364
=	-23.20 %

where

	Invested Capital		(Q: Aug. 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	))
=	20.535	-	4.134	-	( 3.985	-	max(0, 5.582	-	10.102	+	3.985	))
=	12.416

	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	))
=	21.28	-	4.886	-	( 2.082	-	max(0, 7.079	-	10.08	+	2.082	))
=	14.312

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

Rocky Mountain Chocolate Factory (NAS:RMCF) 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, Rocky Mountain Chocolate Factory's WACC % is 8.64%. Rocky Mountain Chocolate Factory's ROIC % is -37.03% (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.

Rocky Mountain Chocolate Factory ROIC % Related Terms

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Rocky Mountain Chocolate Factory (Rocky Mountain Chocolate Factory) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Rocky Mountain Chocolate Factory Inc (NAS:RMCF) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

RMFA:Germany

Address

265 Turner Drive, Durango, CO, USA, 81303

Website

https://www.rmcf.com

Rocky Mountain Chocolate Factory Inc operates as a manufacturer of chocolate candies and confectionery products. The business activity of the firm functions through Franchising, Manufacturing, Retail Stores, U-Swirl Operations, and Other segments. Its products include varieties of Clusters, Caramels, Creams, Toffees, Mints, and Truffles. Geographically, the company and its subsidiaries have stores in Canada, South Korea, Panama, the Philippines, Qatar, and other countries.

Executives

Robert J Sarlls	director, officer: Chief Executive Officer	1703 N. RANDALL ROAD, ELGIN IL 60123-7820
Global Value Investment Corp.	10 percent owner	1433 N WATER STREET, SUITE 549, MILWAUKEE WI 53202
Geygan Jeffrey Richart Geygan	director	1433 N WATER STREET, SUITE 549, MILWAUKEE WI 53202
Brett P Seabert	director	265 TURNER DRIVE, DURANGO CO 81303
A Allen Arroyo	officer: CFO	C/O ROCKY MOUNTAIN CHOCOLATE FACTORY, 265 TURNER DRIVE, DURANGO CO 81303
Gvp 2021-a, Llc	other: GVIC-Controlled Entity	1433 N WATER STREET, SUITE 400, MILWAUKEE WI 53202
Gvp 2021-a, L.p.	other: GVIC-Controlled Entity	1433 N WATER STREET, SUITE 400, MILWAUKEE WI 53202
Kathleen Geygan	other: Director of GVIC	1433 N WATER STREET, SUITE 549, MILWAUKEE WI 53202
Stacy Wilke	other: Officer of GVIC	1433 N WATER STREET, SUITE 549, MILWAUKEE WI 53202
James Geygan	other: Officer of GVIC	1433 N WATER STREET, SUITE 549, MILWAUKEE WI 53202
Mark O Riegel	director	265 TURNER DRIVE, DURANGO CO 81303
Andrew Berger	other: See Explanation of Responses	84 ELM STREET, WESTFIELD NJ 07090
Richard Degnan	other: See footnote 1	2101 FREDRICK DOUGLAS BLVD, NEW YORK NY 10026
Suchit Majmudar	other: See footnote 1	1200 SOUTH GARFIELD STREET, DENVER CO 80210
Mary Bradley	other: See footnote 1	103 ST ANDREWS PLACE, NEWTOWN PA 18940