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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. AYRO's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -222.16%.
As of today (2024-05-16), AYRO's WACC % is 18.08%. AYRO's ROC % is -259.70% (calculated using TTM income statement data). AYRO earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for AYRO'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.
AYRO Annual Data | |||||||||||
Trend | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | ||||||
ROC % | -474.79 | -349.63 | -710.77 | -500.42 | -290.45 |
AYRO Quarterly Data | |||||||||||||||||||
Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
ROC % | Get a 7-Day Free Trial | -685.63 | -468.67 | -339.64 | -172.75 | -222.16 |
AYRO'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 ) |
= | -28.156 * ( 1 - 0% ) | / | ( (3.973 | + | 15.415) | / 2 ) |
= | -28.156 | / | 9.694 | |||
= | -290.45 % |
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 | )) |
= | 54.99 | - | 2.072 | - | ( 48.945 | - | max(0, 2.238 | - | 51.905 | + | 48.945 | )) |
= | 3.973 |
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 | )) |
= | 52.864 | - | 4.008 | - | ( 33.441 | - | max(0, 4.309 | - | 48.98 | + | 33.441 | )) |
= | 15.415 |
AYRO'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: Sep. 2023 ) | + | Invested Capital (Q: Dec. 2023 )) | / count ) |
= | -39.408 * ( 1 - 0% ) | / | ( (20.062 | + | 15.415) | / 2 ) |
= | -39.408 | / | 17.7385 | |||
= | -222.16 % |
where
Invested Capital | (Q: Sep. 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 | )) |
= | 59.798 | - | 1.82 | - | ( 37.916 | - | max(0, 2.012 | - | 55.492 | + | 37.916 | )) |
= | 20.062 |
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 | )) |
= | 52.864 | - | 4.008 | - | ( 33.441 | - | max(0, 4.309 | - | 48.98 | + | 33.441 | )) |
= | 15.415 |
Note: The Operating Income data used here is four times the quarterly (Dec. 2023) 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.
AYRO (NAS:AYRO) 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, AYRO's WACC % is 18.08%. AYRO's ROC % is -259.70% (calculated using TTM income statement data). AYRO 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.
Thank you for viewing the detailed overview of AYRO's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Joshua Silverman | director | IROQUOIS CAPITAL MANAGEMENT LLC, 205 EAST 42ND ST - 20TH FL., NEW YORK NY 10017 |
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Gregory T Schiffman | director | 1030 NW JOHNSON ST, UNIT 608, PORTLAND OR 97209 |
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George Devlin | director | COMPAQ COMPUTER CORP, P O BOX 692000 MC: 110701, HOUSTON TX 77269 |
Wayne Remell Walker | director | 1515 MARKET STREET, SUITE 1720, PHILADELPHIA PA 19103 |
Thomas Michael Wittenschlaeger | officer: Chief Executive Officer | RAPTOR NETWORKS TECHNOLOGY, 65 ENTERPRISE RD., ALISO VIEJO CA 92656 |
David E. Hollingsworth | officer: Interim CFO | 319 FLAT ROCK DR., HUTTO TX 78634 |
Keller Rodney C. Jr. | director, officer: Chief Executive Officer | 900 E. OLD SETTLERS BLVD., SUITE 100, ROUND ROCK TX 78664 |
Richard Perley | officer: Chief Marketing Officer | 900 E. OLD SETTLERS BLVD., SUITE 100, ROUND ROCK TX 78664 |
Curtis Ellis Smith | officer: Chief Financial Officer | 900 E. OLD SETTLERS BLVD., SUITE 100, ROUND ROCK TX 78664 |
Brian Ray Groh | officer: Chief of Business Development | 825 WEST DRUMFRIES ROAD N., PARIS A6 N3L 3E2 |
Mark Adams | director, 10 percent owner | 12130 HIGHWAY 3, BUILDING 1, WEBSTER TX 77598 |
Victoria C Pasquale | officer: Chief Human Resources Officer | C/O DROPCAR, INC., 1412 BROADWAY, SUITE 2105, NEW YORK NY 1008 |
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