Southern Cross Gold (ASX:SXG) ROC % : -38.74% (As of Nov. 2023)

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What is Southern Cross Gold 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 %. Southern Cross Gold's annualized return on capital (ROC %) for the quarter that ended in Nov. 2023 was -38.74%.

As of today (2024-12-12), Southern Cross Gold's WACC % is 10.26%. Southern Cross Gold's ROC % is -28.31% (calculated using TTM income statement data). Southern Cross Gold earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Southern Cross Gold ROC % Historical Data

The historical data trend for Southern Cross Gold'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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Southern Cross Gold ROC % Chart

Southern Cross Gold Annual Data

Trend

May23

May24

ROC %

-19.36

-28.57

Southern Cross Gold Semi-Annual Data
	Dec21	Nov22	May23	Nov23	May24
ROC %	-	-13.28	-31.81	-38.74	-19.65

Southern Cross Gold ROC % Calculation

Southern Cross Gold's annualized Return on Capital (ROC %) for the fiscal year that ended in May. 2024 is calculated as:

	ROC % (A: May. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: May. 2023 )	+	Invested Capital (A: May. 2024 ))	/ count )
=	-6.345 * ( 1 - 0% )	/	( (17.444	+	26.971)	/ 2 )
=	-6.345	/	22.2075
=	-28.57 %

where

	Invested Capital		(A: May. 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	))
=	32.758	-	1.339	-	( 15.187	-	max(0, 1.399	-	15.374	+	15.187	))
=	17.444

	Invested Capital		(A: May. 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	))
=	40.351	-	1.239	-	( 13.362	-	max(0, 1.459	-	13.6	+	13.362	))
=	26.971

Southern Cross Gold's annualized Return on Capital (ROC %) for the quarter that ended in Nov. 2023 is calculated as:

	ROC % (Q: Nov. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: May. 2023 )	+	Invested Capital (Q: Nov. 2023 ))	/ count )
=	-7.798 * ( 1 - 0% )	/	( (17.444	+	22.813)	/ 2 )
=	-7.798	/	20.1285
=	-38.74 %

where

	Invested Capital		(Q: May. 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	))
=	32.758	-	1.339	-	( 15.187	-	max(0, 1.399	-	15.374	+	15.187	))
=	17.444

	Invested Capital		(Q: Nov. 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	))
=	30.931	-	1.162	-	( 7.952	-	max(0, 1.262	-	8.218	+	7.952	))
=	22.813

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

Southern Cross Gold (ASX:SXG) 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, Southern Cross Gold's WACC % is 10.26%. Southern Cross Gold's ROC % is -28.31% (calculated using TTM income statement data). Southern Cross Gold 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.

Southern Cross Gold ROC % Related Terms

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Southern Cross Gold Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Southern Cross Gold Ltd (ASX:SXG) » Definitions » ROC %

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Traded in Other Exchanges

SXGDF:USA

Address

459 Collins Street, Level 21, Melbourne, VIC, AUS, 3000

Website

https://www.southerncrossgold.com.au

Southern Cross Gold Ltd is a mining exploration company focused on gold exploration with projects in Victoria and Queensland, Australia. Its projects include Sunday Creek, Redcastle, and Mt Isa.

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