Bright Minds Biosciences (Bright Minds Biosciences) ROC % : -2,658.06% (As of Mar. 2024)

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What is Bright Minds Biosciences 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 %. Bright Minds Biosciences's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -2,658.06%.

As of today (2024-05-21), Bright Minds Biosciences's WACC % is 14.36%. Bright Minds Biosciences's ROC % is -4390.04% (calculated using TTM income statement data). Bright Minds Biosciences earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Bright Minds Biosciences ROC % Historical Data

The historical data trend for Bright Minds Biosciences'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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Bright Minds Biosciences ROC % Chart

Bright Minds Biosciences Annual Data

Trend

Sep20

Sep21

Sep22

Sep23

ROC %

-35,900.00

-462,266.67

-14,300.64

-4,215.44

Bright Minds Biosciences Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial													-4,447.41	-3,460.32	-4,130.40	-5,626.67	-2,658.06

Bright Minds Biosciences ROC % Calculation

Bright Minds Biosciences's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2023 is calculated as:

	ROC % (A: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2022 )	+	Invested Capital (A: Sep. 2023 ))	/ count )
=	-5.459 * ( 1 - 0% )	/	( (0.155	+	0.104)	/ 2 )
=	-5.459	/	0.1295
=	-4,215.44 %

where

	Invested Capital		(A: Sep. 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	))
=	9.061	-	1.053	-	( 8.717	-	max(0, 1.104	-	8.957	+	8.717	))
=	0.155

	Invested Capital		(A: 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	))
=	5.084	-	0.153	-	( 4.987	-	max(0, 0.208	-	5.035	+	4.987	))
=	0.104

Bright Minds Biosciences's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-1.648 * ( 1 - 0% )	/	( (0.076	+	0.048)	/ 2 )
=	-1.648	/	0.062
=	-2,658.06 %

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	))
=	5.133	-	0.596	-	( 5.04	-	max(0, 0.637	-	5.098	+	5.04	))
=	0.076

	Invested Capital		(Q: Mar. 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	))
=	4.825	-	0.599	-	( 4.382	-	max(0, 0.625	-	4.803	+	4.382	))
=	0.048

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

Bright Minds Biosciences (NAS:DRUG) 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, Bright Minds Biosciences's WACC % is 14.36%. Bright Minds Biosciences's ROC % is -4390.04% (calculated using TTM income statement data). Bright Minds Biosciences 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.

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Bright Minds Biosciences (Bright Minds Biosciences) Business Description

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DRUG:Canada

Address

19 Vestry Street, New York, NY, USA, 10013

Website

https://www.brightmindsbio.com

Bright Minds Biosciences Inc is focused on developing novel transformative treatments for neuropsychiatric disorders, epilepsy, and pain. The company has a portfolio of next-generation serotonin agonists designed to target neurocircuit abnormalities that are responsible for difficult to treat disorders such as resistant epilepsy, treatment resistant depression, PTSD, and pain. The company's drugs have been designed to potentially retain the powerful therapeutic aspects of psychedelic and other serotonergic compounds, while minimizing the side effects, thereby creating superior drugs to first-generation compounds, such as psilocybin.