Australian Strategic Materials (ASX:ASM) ROC % : -19.24% (As of Jun. 2024)

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What is Australian Strategic Materials 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 %. Australian Strategic Materials's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -19.24%.

As of today (2025-03-04), Australian Strategic Materials's WACC % is 12.09%. Australian Strategic Materials's ROC % is -12.68% (calculated using TTM income statement data). Australian Strategic Materials earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Australian Strategic Materials ROC % Historical Data

The historical data trend for Australian Strategic Materials'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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Australian Strategic Materials ROC % Chart

Australian Strategic Materials Annual Data

Trend

Jun21

Jun22

Jun23

Jun24

ROC %

-2.20

-14.51

-14.01

-12.57

Australian Strategic Materials Semi-Annual Data
	Dec19	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial				-15.50	-9.83	-17.63	-6.64	-19.24

Australian Strategic Materials ROC % Calculation

Australian Strategic Materials's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2024 is calculated as:

	ROC % (A: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2023 )	+	Invested Capital (A: Jun. 2024 ))	/ count )
=	-26.828 * ( 1 - -0.11% )	/	( (207.171	+	220.28)	/ 2 )
=	-26.8575108	/	213.7255
=	-12.57 %

where

	Invested Capital		(A: Jun. 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	))
=	267.22	-	3.394	-	( 56.655	-	max(0, 23.678	-	87.315	+	56.655	))
=	207.171

	Invested Capital		(A: Jun. 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	))
=	258.965	-	4.803	-	( 47.602	-	max(0, 33.147	-	67.029	+	47.602	))
=	220.28

Australian Strategic Materials's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-37.57 * ( 1 - -9.67% )	/	( (208.037	+	220.28)	/ 2 )
=	-41.203019	/	214.1585
=	-19.24 %

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	))
=	257.476	-	3.972	-	( 45.467	-	max(0, 24.812	-	71.675	+	45.467	))
=	208.037

	Invested Capital		(Q: Jun. 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	))
=	258.965	-	4.803	-	( 47.602	-	max(0, 33.147	-	67.029	+	47.602	))
=	220.28

Note: The Operating Income data used here is two times the semi-annual (Jun. 2024) data.

Australian Strategic Materials (ASX:ASM) 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, Australian Strategic Materials's WACC % is 12.09%. Australian Strategic Materials's ROC % is -12.68% (calculated using TTM income statement data). Australian Strategic Materials 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.

Australian Strategic Materials ROC % Related Terms

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Australian Strategic Materials Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

ASMMF:USA

Address

66 Kings Park Road, Level 4, West Perth, Perth, WA, AUS, 6005

Website

https://www.asm-au.com

Australian Strategic Materials Ltd is engaged in the business of producing and mining specialty metal and oxides. The product portfolio includes neodymium, praseodymium, zirconium, hafnium, dysprosium, terbium and niobium oxides. Its Dubbo Project includes Central Western New South Wales, Australia. The company's segment includes Corporate, Dubbo, and Korea. The company generates majority of its revenue from Korea, which includes the Korean Metals Plant.