Renergen (ASX:RLT) ROC % : -5.24% (As of Aug. 2024)

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What is Renergen 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 %. Renergen's annualized return on capital (ROC %) for the quarter that ended in Aug. 2024 was -5.24%.

As of today (2024-12-11), Renergen's WACC % is 8.66%. Renergen's ROC % is -4.83% (calculated using TTM income statement data). Renergen earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Renergen ROC % Historical Data

The historical data trend for Renergen'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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Renergen ROC % Chart

Renergen Annual Data

Trend

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

Feb24

ROC %

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-13.01

-5.32

-3.94

-2.34

-4.00

Renergen Semi-Annual Data
	Aug16	Feb17	Aug17	Feb18	Aug18	Feb19	Aug19	Feb20	Aug20	Feb21	Aug21	Feb22	Aug22	Feb23	Aug23	Feb24	Aug24
ROC %	Get a 7-Day Free Trial												-3.55	-0.82	-3.31	-4.38	-5.24

Renergen ROC % Calculation

Renergen's annualized Return on Capital (ROC %) for the fiscal year that ended in Feb. 2024 is calculated as:

	ROC % (A: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Feb. 2023 )	+	Invested Capital (A: Feb. 2024 ))	/ count )
=	-9.696 * ( 1 - 25.31% )	/	( (150.608	+	211.823)	/ 2 )
=	-7.2419424	/	181.2155
=	-4.00 %

where

	Invested Capital		(A: Feb. 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	))
=	154.031	-	5.759	-	( 4.514	-	max(0, 16.235	-	13.899	+	4.514	))
=	150.608

	Invested Capital		(A: Feb. 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	))
=	218.391	-	4.346	-	( 37.975	-	max(0, 46.075	-	48.297	+	37.975	))
=	211.823

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

	ROC % (Q: Aug. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Feb. 2024 )	+	Invested Capital (Q: Aug. 2024 ))	/ count )
=	-13.564 * ( 1 - 16.68% )	/	( (211.823	+	219.788)	/ 2 )
=	-11.3015248	/	215.8055
=	-5.24 %

where

	Invested Capital		(Q: Feb. 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	))
=	218.391	-	4.346	-	( 37.975	-	max(0, 46.075	-	48.297	+	37.975	))
=	211.823

	Invested Capital		(Q: Aug. 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	))
=	204.491	-	7.451	-	( 8.382	-	max(0, 39.112	-	16.364	+	8.382	))
=	219.788

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

Renergen (ASX:RLT) 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, Renergen's WACC % is 8.66%. Renergen's ROC % is -4.83% (calculated using TTM income statement data). Renergen 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.

Renergen ROC % Related Terms

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Renergen Business Description

Industry

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REN:South Africa RGNNF:USA 9960:Germany

Address

25 Minerva Avenue, Sandton Gate, Glenadrienne, Sandton, ZAF, 2196

Website

https://www.renergen.co.za

Renergen Ltd is an investment holding company focused on the alternative and renewable energy sectors in South Africa and sub-Saharan Africa. Its reportable segments are the Corporate Head office where all investment decisions are made; Tetra4 which explores, produces, and sells LNG in South Africa; Cryovation which has developed Cryo-VaccTM technology, and enables the safe transportation of vaccines and biologics at extremely low temperatures without the need for electrical power; and the Renergen U.S segment which assists with various fundraising and business development activities of the Group in the U.S market. The majority of the company's revenue is generated from the Tetra4 segment.

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