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Canopy Growth ROIC %

: -10.63% (As of Dec. 2019)
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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 %. Canopy Growth's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2019 was -10.63%.

As of today (2020-06-06), Canopy Growth's WACC % is 13.95%. Canopy Growth's ROIC % is -19.21% (calculated using TTM income statement data). Canopy Growth earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Canopy Growth ROIC % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Canopy Growth Annual Data
Jul10 Jul11 Jul12 Jul13 Dec14 Mar16 Mar17 Mar18 Mar19
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only -87.09 -1.92 -1.40 -10.22 -22.34

Canopy Growth Quarterly Data
Dec14 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19
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 -17.69 -17.94 -9.65 -20.16 -10.63

Competitive Comparison
* 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.


Canopy Growth ROIC % Distribution

* The bar in red indicates where Canopy Growth's ROIC % falls into.



Canopy Growth ROIC % Calculation

Canopy Growth's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2019 is calculated as:

ROIC % (A: Mar. 2019 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Mar. 2018 ) + Invested Capital (A: Mar. 2019 ))/ count )
=-414.06401914591 * ( 1 - -1.87% )/( (792.3034098817 + 2984.3010993942)/ 2 )
=-421.80701630394/1888.302254638
=-22.34 %

where

Invested Capital(A: Mar. 2018 )
=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))
=1110.9696126189 - 69.25771282765 - ( 249.40848990953 - max(0, 71.157504059383 - 372.51759065955+249.40848990953))
=792.3034098817

Invested Capital(A: Mar. 2019 )
=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))
=6530.4053548725 - 169.4211352928 - ( 3376.6831201855 - max(0, 307.87749607359 - 3791.8929025503+3376.6831201855))
=2984.3010993942

Canopy Growth's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2019 is calculated as:

ROIC % (Q: Dec. 2019 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Sep. 2019 ) + Invested Capital (Q: Dec. 2019 ))/ count )
=-511.09119902802 * ( 1 - 15.31% )/( (3928.8309040103 + 4216.9306705141)/ 2 )
=-432.84313645683/4072.8807872622
=-10.63 %

where

Invested Capital(Q: Sep. 2019 )
=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))
=6211.9046899781 - 216.64677894419 - ( 2066.4270070236 - max(0, 321.59957707122 - 2695.0441809531+2066.4270070236))
=3928.8309040103

Invested Capital(Q: Dec. 2019 )
=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))
=6109.8352190751 - 170.993241704 - ( 1721.911306857 - max(0, 317.64674614625 - 2409.2383628218+1721.911306857))
=4216.9306705141

Note: The Operating Income data used here is four times the quarterly (Dec. 2019) data.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Canopy Growth  (NYSE:CGC) 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, Canopy Growth's WACC % is 13.95%. Canopy Growth's ROIC % is -19.21% (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.


Canopy Growth ROIC % Related Terms


Canopy Growth ROIC % Headlines

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