Great Divide Mining (ASX:GDM) ROC % : -83.42% (As of Dec. 2023)

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What is Great Divide Mining 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 %. Great Divide Mining's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -83.42%.

As of today (2024-12-12), Great Divide Mining's WACC % is 9.75%. Great Divide Mining's ROC % is -71.40% (calculated using TTM income statement data). Great Divide Mining earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Great Divide Mining ROC % Historical Data

The historical data trend for Great Divide Mining'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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Great Divide Mining ROC % Chart

Great Divide Mining Annual Data

Trend

Jun23

Jun24

ROC %

-82.62

-74.07

Great Divide Mining Semi-Annual Data
	Dec22	Jun23	Dec23	Jun24
ROC %	-195.90	-93.40	-83.42	-60.60

Great Divide Mining ROC % Calculation

Great Divide Mining'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 )
=	-1.248 * ( 1 - 0% )	/	( (1.099	+	2.271)	/ 2 )
=	-1.248	/	1.685
=	-74.07 %

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	))
=	0.359	-	0.436	-	( 0.009	-	max(0, 1.33	-	0.154	+	0.009	))
=	1.099

	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	))
=	3.851	-	0.22	-	( 1.47	-	max(0, 0.265	-	1.625	+	1.47	))
=	2.271

Great Divide Mining's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-1.24 * ( 1 - 0% )	/	( (1.099	+	1.874)	/ 2 )
=	-1.24	/	1.4865
=	-83.42 %

where

	Invested Capital		(Q: 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	))
=	0.359	-	0.436	-	( 0.009	-	max(0, 1.33	-	0.154	+	0.009	))
=	1.099

	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	))
=	4.668	-	0.543	-	( 2.726	-	max(0, 0.58	-	2.831	+	2.726	))
=	1.874

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Great Divide Mining (ASX:GDM) 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, Great Divide Mining's WACC % is 9.75%. Great Divide Mining's ROC % is -71.40% (calculated using TTM income statement data). Great Divide Mining 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.

Great Divide Mining ROC % Related Terms

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Great Divide Mining Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Great Divide Mining Ltd (ASX:GDM) » Definitions » ROC %

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Traded in Other Exchanges

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Address

127 Creek Street, Level 12, Brisbane, QLD, AUS, 4000

Website

https://www.greatdividemining.com.au

Great Divide Mining Ltd is a mineral exploration company. It focuses on the exploration and development of its projects for Gold, Antimony, and Copper, with Lithium and Rare Earth Metals. The Group only had one Australian operating segment and the only geographic segment revenue.

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