Artelo Biosciences (Artelo Biosciences) ROC % : -483.59% (As of Mar. 2024)

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What is Artelo Biosciences 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 %. Artelo Biosciences's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -483.59%.

As of today (2024-06-06), Artelo Biosciences's WACC % is 8.80%. Artelo Biosciences's ROC % is -468.70% (calculated using TTM income statement data). Artelo Biosciences earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Artelo Biosciences ROC % Historical Data

The historical data trend for Artelo Biosciences'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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Artelo Biosciences ROC % Chart

Artelo Biosciences Annual Data

Trend

Aug14

Aug15

Aug16

Aug17

Aug18

Aug19

Aug20

Aug21

Dec22

Dec23

ROC %

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-310.00

-228.08

-339.38

-458.42

-469.73

Artelo Biosciences Quarterly Data
	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															-421.61	-315.47	-473.12	-618.76	-483.59

Artelo Biosciences ROC % Calculation

Artelo Biosciences's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-9.93 * ( 1 - 0% )	/	( (2.142	+	2.086)	/ 2 )
=	-9.93	/	2.114
=	-469.73 %

where

	Invested Capital		(A: Dec. 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	))
=	20.424	-	0.958	-	( 17.533	-	max(0, 0.998	-	18.322	+	17.533	))
=	2.142

	Invested Capital		(A: Dec. 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	))
=	13.043	-	1.268	-	( 10.426	-	max(0, 1.291	-	10.98	+	10.426	))
=	2.086

Artelo Biosciences's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-10.356 * ( 1 - 0% )	/	( (2.086	+	2.197)	/ 2 )
=	-10.356	/	2.1415
=	-483.59 %

where

	Invested Capital		(Q: Dec. 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	))
=	13.043	-	1.268	-	( 10.426	-	max(0, 1.291	-	10.98	+	10.426	))
=	2.086

	Invested Capital		(Q: Mar. 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	))
=	10.354	-	0.69	-	( 7.609	-	max(0, 0.721	-	8.188	+	7.609	))
=	2.197

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

Artelo Biosciences (NAS:ARTLW) 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, Artelo Biosciences's WACC % is 8.80%. Artelo Biosciences's ROC % is -468.70% (calculated using TTM income statement data). Artelo Biosciences 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.

Artelo Biosciences ROC % Related Terms

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Artelo Biosciences (Artelo Biosciences) Business Description

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ARTL:USA

Address

505 Lomas Santa Fe, Suite 160, Solana Beach, CA, USA, 92075

Website

https://www.artelobio.com

Artelo Biosciences Inc is a United States-based development-stage biopharmaceutical company. It is engaged in development of therapeutics that target lipid signaling pathways, including the endocannabinoid system, a family of receptors and neurotransmitters that form a biochemical communication network in body. It is focused on discovering, licensing, developing and commercializing treatments that control endocannabinoid system. The company pursues technologies and programs that offer proprietary approaches to cannabinoid-based therapies, also those derived from the cannabis plant and synthetic cannabinoids, as well as new chemical entities and compounds. The firm's flagship program is designed to be a patent-protected cannabinoid drug combination treatment for a rare and orphan disease.