Desert Peak Minerals (Desert Peak Minerals) ROC % : 0.00% (As of Jun. 2021)

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What is Desert Peak Minerals 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 %. Desert Peak Minerals's annualized return on capital (ROC %) for the quarter that ended in Jun. 2021 was 0.00%.

As of today (2024-05-14), Desert Peak Minerals's WACC % is 0.00%. Desert Peak Minerals's ROC % is 0.00% (calculated using TTM income statement data). Desert Peak Minerals earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Desert Peak Minerals ROC % Historical Data

The historical data trend for Desert Peak Minerals'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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Desert Peak Minerals ROC % Chart

Desert Peak Minerals Annual Data

Trend

Dec19

Dec20

ROC %

1.65

-1.50

Desert Peak Minerals Quarterly Data
	Dec19	Dec20	Jun21
ROC %	-	-	-

Desert Peak Minerals ROC % Calculation

Desert Peak Minerals's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2020 is calculated as:

	ROC % (A: Dec. 2020 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2019 )	+	Invested Capital (A: Dec. 2020 ))	/ count )
=	-8.942 * ( 1 - -0.27% )	/	( (607.577	+	589.142)	/ 2 )
=	-8.9661434	/	598.3595
=	-1.50 %

where

	Invested Capital		(A: Dec. 2019 )
=	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	))
=	631.805	-	7.721	-	( 16.507	-	max(0, 8.142	-	33.024	+	16.507	))
=	607.577

	Invested Capital		(A: Dec. 2020 )
=	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	))
=	598.628	-	1.955	-	( 7.531	-	max(0, 2.09	-	16.174	+	7.531	))
=	589.142

Desert Peak Minerals's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2021 is calculated as:

	ROC % (Q: Jun. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2020 )	+	Invested Capital (Q: Jun. 2021 ))	/ count )
=	0 * ( 1 - % )	/	( (589.142	+	898.467)	/ 2 )
=	0	/	743.8045
=	0.00 %

where

	Invested Capital		(Q: Dec. 2020 )
=	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	))
=	598.628	-	1.955	-	( 7.531	-	max(0, 2.09	-	16.174	+	7.531	))
=	589.142

	Invested Capital		(Q: Jun. 2021 )
=	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	))
=	909.548	-	4.893	-	( 6.188	-	max(0, 6.449	-	18.077	+	6.188	))
=	898.467

Note: The Operating Income data used here is four times the quarterly (Jun. 2021) data.

Desert Peak Minerals (NYSE:DPM) 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, Desert Peak Minerals's WACC % is 0.00%. Desert Peak Minerals's ROC % is 0.00% (calculated using TTM income statement data). Desert Peak Minerals 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.

Desert Peak Minerals ROC % Related Terms

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Desert Peak Minerals (Desert Peak Minerals) Business Description

Industry

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Address

Website

http://www.desertpeak.com

Desert Peak Minerals Inc acquires, owns, and manages mineral and royalty interests in the Permian Basin. Its mineral and royalty interests entitle the company to receive a fixed percentage of the revenue from crude oil, natural gas, and NGLs produced from the acreage.