Avantium NV (CHIX:AVTXA) ROC % : -17.64% (As of Jun. 2024)

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What is Avantium NV 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 %. Avantium NV's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -17.64%.

As of today (2024-12-15), Avantium NV's WACC % is 2.83%. Avantium NV's ROC % is -20.46% (calculated using TTM income statement data). Avantium NV earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Avantium NV ROC % Historical Data

The historical data trend for Avantium NV'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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Avantium NV ROC % Chart

Avantium NV Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-49.43

-44.30

-49.67

-31.01

-21.57

Avantium NV Semi-Annual Data
	Dec12	Dec13	Dec14	Dec15	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															-57.39	-23.58	-26.83	-22.39	-17.64

Avantium NV ROC % Calculation

Avantium NV'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 )
=	-34.855 * ( 1 - 0% )	/	( (112.357	+	210.855)	/ 2 )
=	-34.855	/	161.606
=	-21.57 %

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	))
=	163.584	-	9.493	-	( 58.37	-	max(0, 33.778	-	75.512	+	58.37	))
=	112.357

	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	))
=	228.487	-	16.095	-	( 33.716	-	max(0, 52.728	-	54.265	+	33.716	))
=	210.855

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

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-37.594 * ( 1 - 0% )	/	( (210.855	+	215.309)	/ 2 )
=	-37.594	/	213.082
=	-17.64 %

where

	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	))
=	228.487	-	16.095	-	( 33.716	-	max(0, 52.728	-	54.265	+	33.716	))
=	210.855

	Invested Capital		(Q: Jun. 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	))
=	270.49	-	39.509	-	( 41.79	-	max(0, 42.029	-	57.701	+	41.79	))
=	215.309

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

Avantium NV (CHIX:AVTXa) 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, Avantium NV's WACC % is 2.83%. Avantium NV's ROC % is -20.46% (calculated using TTM income statement data). Avantium NV 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.

Avantium NV ROC % Related Terms

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Avantium NV Business Description

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AVTXF:USA AVTX:Netherlands 0RNP:UK 27V:Germany

Address

Zekeringstraat 29-31, Amsterdam, NLD, 1014 BV

Website

https://www.avantium.com

Avantium NV along with its subsidiaries is engaged in developing and commercializing next-generation bio-based plastics and chemicals based on its technological capabilities in catalysis research and development. Avantium also provides solutions in the field of sustainable chemistry and provider of catalyst testing technology. The company operates through segments: R&D Solutions, Renewable Chemistries, and Renewable Polymer segments. The company generates the majority of its revenue from the R&D Solutions segment.

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