Clearmind Medicine (Clearmind Medicine) ROC % : -167.57% (As of Jan. 2024)

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What is Clearmind Medicine 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 %. Clearmind Medicine's annualized return on capital (ROC %) for the quarter that ended in Jan. 2024 was -167.57%.

As of today (2024-06-18), Clearmind Medicine's WACC % is 9.59%. Clearmind Medicine's ROC % is -220.08% (calculated using TTM income statement data). Clearmind Medicine earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Clearmind Medicine ROC % Historical Data

The historical data trend for Clearmind Medicine'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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Clearmind Medicine ROC % Chart

Clearmind Medicine Annual Data

Trend

Oct17

Oct18

Oct19

Oct20

Oct21

Oct22

Oct23

ROC %

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-62.02

-131.09

-1,325.00

-1,276.13

-242.83

Clearmind Medicine Quarterly Data
	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
ROC %	Get a 7-Day Free Trial															-1,635.57	-541.45	-260.91	-203.04	-167.57

Clearmind Medicine ROC % Calculation

Clearmind Medicine's annualized Return on Capital (ROC %) for the fiscal year that ended in Oct. 2023 is calculated as:

	ROC % (A: Oct. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Oct. 2022 )	+	Invested Capital (A: Oct. 2023 ))	/ count )
=	-4.558 * ( 1 - -0.21% )	/	( (0.53	+	3.232)	/ 2 )
=	-4.5675718	/	1.881
=	-242.83 %

where

	Invested Capital		(A: Oct. 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	))
=	0.607	-	1.178	-	( 0.237	-	max(0, 1.42	-	0.319	+	0.237	))
=	0.53

	Invested Capital		(A: Oct. 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	))
=	4.305	-	0.477	-	( 3.987	-	max(0, 3.594	-	4.19	+	3.987	))
=	3.232

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

	ROC % (Q: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Oct. 2023 )	+	Invested Capital (Q: Jan. 2024 ))	/ count )
=	-5.536 * ( 1 - -17.32% )	/	( (3.232	+	4.52)	/ 2 )
=	-6.4948352	/	3.876
=	-167.57 %

where

	Invested Capital		(Q: Oct. 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	))
=	4.305	-	0.477	-	( 3.987	-	max(0, 3.594	-	4.19	+	3.987	))
=	3.232

	Invested Capital		(Q: Jan. 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	))
=	10.098	-	0.761	-	( 9.373	-	max(0, 5.026	-	9.843	+	9.373	))
=	4.52

Note: The Operating Income data used here is four times the quarterly (Jan. 2024) data.

Clearmind Medicine (NAS:CMND) 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, Clearmind Medicine's WACC % is 9.59%. Clearmind Medicine's ROC % is -220.08% (calculated using TTM income statement data). Clearmind Medicine 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.

Clearmind Medicine ROC % Related Terms

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Clearmind Medicine (Clearmind Medicine) Business Description

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Address

101-1220 West 6th Avenue, Vancouver, BC, CAN, V6H 1A5

Website

https://www.clearmindmedicine.com

Clearmind Medicine Inc is a psychedelic pharmaceutical biotech company focused on the discovery and development of novel psychedelic-derived therapeutics to solve widespread and underserved health problems, including alcohol use disorder. Its primary objective is to research and develop psychedelic-based compounds and attempt to commercialize them as regulated medicines, foods, or supplements. The company's intellectual portfolio currently consists of four patent families. The company intends to seek additional patents for its compounds whenever warranted and will remain opportunistic regarding the acquisition of additional intellectual property to build its portfolio.