Looking Glass Labs (AQSE:NFTX) ROC % : 71.13% (As of Jan. 2024)

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What is Looking Glass Labs ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Looking Glass Labs's annualized return on capital (ROC %) for the quarter that ended in Jan. 2024 was 71.13%.

As of today (2024-05-29), Looking Glass Labs's WACC % is 9.66%. Looking Glass Labs's ROC % is -1.20% (calculated using TTM income statement data). Looking Glass Labs earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Looking Glass Labs ROC % Historical Data

The historical data trend for Looking Glass Labs's ROC % 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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Looking Glass Labs ROC % Chart

Looking Glass Labs Annual Data

Trend

Jul20

Jul21

Jul22

Jul23

ROC %

-58.06

-50.41

-217.56

-115.43

Looking Glass Labs Quarterly Data
	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
ROC %	Get a 7-Day Free Trial											-126.47	-44.28	-30.80	47.27	71.13

Looking Glass Labs ROC % Calculation

Looking Glass Labs's annualized Return on Capital (ROC %) for the fiscal year that ended in Jul. 2023 is calculated as:

	ROC % (A: Jul. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jul. 2022 )	+	Invested Capital (A: Jul. 2023 ))	/ count )
=	-3.21 * ( 1 - 0% )	/	( (4.308	+	1.254)	/ 2 )
=	-3.21	/	2.781
=	-115.43 %

where

	Invested Capital		(A: Jul. 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	))
=	4.811	-	0.594	-	( 0.199	-	max(0, 0.726	-	0.635	+	0.199	))
=	4.308

	Invested Capital		(A: Jul. 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	))
=	0.492	-	0.676	-	( 0.028	-	max(0, 1.587	-	0.149	+	0.028	))
=	1.254

Looking Glass Labs's annualized Return on Capital (ROC %) for the quarter that ended in Jan. 2024 is calculated as:

	ROC % (Q: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Oct. 2023 )	+	Invested Capital (Q: Jan. 2024 ))	/ count )
=	0.956 * ( 1 - 0% )	/	( (1.911	+	0.777)	/ 2 )
=	0.956	/	1.344
=	71.13 %

where

	Invested Capital		(Q: Oct. 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	))
=	0.311	-	0.758	-	( 0.04	-	max(0, 2.517	-	0.159	+	0.04	))
=	1.911

	Invested Capital		(Q: Jan. 2024 )
=	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	))
=	0.639	-	0.735	-	( 0.423	-	max(0, 1.423	-	0.55	+	0.423	))
=	0.777

Note: The Operating Income data used here is four times the quarterly (Jan. 2024) data.

Looking Glass Labs (AQSE:NFTX) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. 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 ROC % 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, Looking Glass Labs's WACC % is 9.66%. Looking Glass Labs's ROC % is -1.20% (calculated using TTM income statement data). Looking Glass Labs 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 %, ROC % 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.

Looking Glass Labs ROC % Related Terms

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Looking Glass Labs (AQSE:NFTX) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Looking Glass Labs Ltd (AQSE:NFTX) » Definitions » ROC %

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Traded in Other Exchanges

H1N0:Germany NFTX:Canada

Address

1890-1075 West Georgia Street, Vancouver, BC, CAN, V6E 3C9

Website

https://www.lgl.io

Looking Glass Labs Ltd is a digital agency for the Metaverse. It partners with and supports NFT collections to earn revenues from drops and royalties from secondary market re-sales. It provides services which include NFT Marketing, Partnerships & Collaborations, Development & Minting Services, Community Growth & Moderation, Brand Design & Management, Smart Contracts, Legal Services, and Metaverse Integration. The company operates within two geographic areas, Canada and Vietnam and has one operating segment which is the design, development, and sale of exclusive Non-Fungible Tokens (NFTs). It earns majority of its revenue from its operations in Canada.

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