Viva Energy Group (ASX:VEA) ROC % : -27.98% (As of Dec. 2023)

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What is Viva Energy Group 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 %. Viva Energy Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -27.98%.

As of today (2024-05-15), Viva Energy Group's WACC % is 4.89%. Viva Energy Group's ROC % is -1.71% (calculated using TTM income statement data). Viva Energy Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Viva Energy Group ROC % Historical Data

The historical data trend for Viva Energy Group'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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Viva Energy Group ROC % Chart

Viva Energy Group Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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1.22

-0.56

6.14

8.12

-1.70

Viva Energy Group Semi-Annual Data
	Dec17	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial							5.32	16.83	-4.95	5.19	-27.98

Viva Energy Group ROC % Calculation

Viva Energy Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-881.9 * ( 1 - 89.65% )	/	( (5234.5	+	5472.8)	/ 2 )
=	-91.27665	/	5353.65
=	-1.70 %

where

	Invested Capital		(A: Dec. 2022 )
=	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	))
=	8623.6	-	3248.7	-	( 290.5	-	max(0, 3749	-	3889.4	+	290.5	))
=	5234.5

	Invested Capital		(A: 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	))
=	9082.3	-	3604.9	-	( 215.5	-	max(0, 4120.4	-	4125	+	215.5	))
=	5472.8

Viva Energy Group'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 )
=	-2019 * ( 1 - 25.48% )	/	( (5283.3	+	5472.8)	/ 2 )
=	-1504.5588	/	5378.05
=	-27.98 %

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	))
=	8644.4	-	3300.6	-	( 202.9	-	max(0, 3670.8	-	3731.3	+	202.9	))
=	5283.3

	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	))
=	9082.3	-	3604.9	-	( 215.5	-	max(0, 4120.4	-	4125	+	215.5	))
=	5472.8

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

Viva Energy Group (ASX:VEA) 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, Viva Energy Group's WACC % is 4.89%. Viva Energy Group's ROC % is -1.71% (calculated using TTM income statement data). Viva Energy Group 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.

Viva Energy Group ROC % Related Terms

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Viva Energy Group (ASX:VEA) Business Description

Industry

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2AH:Germany

Address

720 Bourke Street, Level 16, Docklands, Melbourne, VIC, AUS, 3008

Website

https://www.vivaenergy.com.au

Viva is Australia's second-largest vertically integrated refined transport fuel supplier. We rate Viva as the second-most-significant pipeline owner, and at approximately 1,155 locations, Viva supplies the third-largest number of retail sites in Australia behind Ampol at approximately 1,985 and BP at 1,400.Vitol bought Shell's Australian downstream operations in 2014, and renamed them Viva Energy. Viva subsequently bought Shell's Australian aviation operations and a 50% investment in Liberty Oil. In 2016, Viva sold (and leased back) a portfolio of its retail sites to Viva Energy REIT and listed Viva Energy REIT on the ASX. It has since sold its entire REIT stake for AUD 734 million.