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Little Green Pharma (ASX:LGP) ROC % : -8.38% (As of Sep. 2024)


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What is Little Green Pharma 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 %. Little Green Pharma's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -8.38%.

As of today (2025-03-17), Little Green Pharma's WACC % is 8.98%. Little Green Pharma's ROC % is -15.95% (calculated using TTM income statement data). Little Green Pharma earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Little Green Pharma ROC % Historical Data

The historical data trend for Little Green Pharma'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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Little Green Pharma ROC % Chart

Little Green Pharma Annual Data
Trend Jun19 Jun20 Jun21 Mar23 Mar24
ROC %
- -94.33 -12.24 -17.71 -15.18

Little Green Pharma Semi-Annual Data
Jun20 Dec20 Jun21 Dec21 Mar23 Sep23 Mar24 Sep24
ROC % Get a 7-Day Free Trial -24.69 - -6.90 -23.16 -8.38

Little Green Pharma ROC % Calculation

Little Green Pharma's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

ROC % (A: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Mar. 2023 ) + Invested Capital (A: Mar. 2024 ))/ count )
=-12.243 * ( 1 - 0% )/( (82.865 + 78.486)/ 2 )
=-12.243/80.6755
=-15.18 %

where

Little Green Pharma's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

ROC % (Q: Sep. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2024 ) + Invested Capital (Q: Sep. 2024 ))/ count )
=-6.428 * ( 1 - 0% )/( (78.486 + 74.917)/ 2 )
=-6.428/76.7015
=-8.38 %

where

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

* 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.


Little Green Pharma  (ASX:LGP) 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, Little Green Pharma's WACC % is 8.98%. Little Green Pharma's ROC % is -15.95% (calculated using TTM income statement data). Little Green Pharma 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.


Little Green Pharma ROC % Related Terms

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Little Green Pharma Business Description

Traded in Other Exchanges
N/A
Address
66 Kings Park Road, Level 2, Suite 2, West Perth, Perth, WA, AUS, 6005
Little Green Pharma Ltd is engaged in the vertically integrated medicinal cannabis business. The business activities of the company include cultivation, production, research and development, manufacturing, and distribution of medicinal cannabis products. The company's two key types of products available at Little Green Pharma are oils (which are ingested) and flowers (which are usually inhaled through vaporizing). It offers LGP-branded medicinal cannabis oil products in the Australian and European markets.

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