Palla Pharma (ASX:PAL) ROC % : -51.66% (As of Jun. 2021)

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What is Palla 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 %. Palla Pharma's annualized return on capital (ROC %) for the quarter that ended in Jun. 2021 was -51.66%.

As of today (2024-05-17), Palla Pharma's WACC % is 0.00%. Palla Pharma's ROC % is 0.00% (calculated using TTM income statement data). Palla Pharma earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Palla Pharma ROC % Historical Data

The historical data trend for Palla 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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Palla Pharma ROC % Chart

Palla Pharma Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

ROC %

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-36.61

-21.53

-7.30

-3.68

-28.55

Palla Pharma Semi-Annual Data
	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21
ROC %	Get a 7-Day Free Trial							-2.49	-4.69	-20.96	-34.01	-51.66

Palla Pharma ROC % Calculation

Palla Pharma's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2020 is calculated as:

	ROC % (A: Dec. 2020 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2019 )	+	Invested Capital (A: Dec. 2020 ))	/ count )
=	-19.452 * ( 1 - 0% )	/	( (78.647	+	57.596)	/ 2 )
=	-19.452	/	68.1215
=	-28.55 %

where

	Invested Capital		(A: Dec. 2019 )
=	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	))
=	89.573	-	8.907	-	( 2.019	-	max(0, 11.222	-	43.152	+	2.019	))
=	78.647

	Invested Capital		(A: Dec. 2020 )
=	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	))
=	67.42	-	9.214	-	( 0.61	-	max(0, 16.05	-	36.585	+	0.61	))
=	57.596

Palla Pharma's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2021 is calculated as:

	ROC % (Q: Jun. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2020 )	+	Invested Capital (Q: Jun. 2021 ))	/ count )
=	-24.558 * ( 1 - 0% )	/	( (57.596	+	37.488)	/ 2 )
=	-24.558	/	47.542
=	-51.66 %

where

	Invested Capital		(Q: Dec. 2020 )
=	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	))
=	67.42	-	9.214	-	( 0.61	-	max(0, 16.05	-	36.585	+	0.61	))
=	57.596

	Invested Capital		(Q: Jun. 2021 )
=	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	))
=	49.886	-	11.501	-	( 0.897	-	max(0, 28.104	-	30.678	+	0.897	))
=	37.488

Note: The Operating Income data used here is two times the semi-annual (Jun. 2021) data.

Palla Pharma (ASX:PAL) 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, Palla Pharma's WACC % is 0.00%. Palla Pharma's ROC % is 0.00% (calculated using TTM income statement data). Palla 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.

Palla Pharma ROC % Related Terms

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Palla Pharma (ASX:PAL) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Palla Pharma Ltd (ASX:PAL) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

c/- Mertons Corporate Services, 330 Collins Street, Level 7, Melbourne, VIC, AUS, 3000

Website

http://www.tpienterprises.com

Palla Pharma Ltd is a licensed poppy processor in Australia. It is engaged in producing narcotic raw material for the international pharmaceutical industry. It also supplies narcotic raw material and culinary poppy seed.

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