Earth Gen-Biofuel (Earth Gen-Biofuel) ROC % : -85.89% (As of Jun. 2016)

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What is Earth Gen-Biofuel 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 %. Earth Gen-Biofuel's annualized return on capital (ROC %) for the quarter that ended in Jun. 2016 was -85.89%.

As of today (2024-05-15), Earth Gen-Biofuel's WACC % is 0.00%. Earth Gen-Biofuel's ROC % is 0.00% (calculated using TTM income statement data). Earth Gen-Biofuel earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Earth Gen-Biofuel ROC % Historical Data

The historical data trend for Earth Gen-Biofuel'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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Earth Gen-Biofuel ROC % Chart

Earth Gen-Biofuel Annual Data

Trend

Dec13

Dec14

Dec15

ROC %

-4,800.00

-548.64

-145.94

Earth Gen-Biofuel Quarterly Data
	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16
ROC %	Get a 7-Day Free Trial							-135.40	-145.55	-157.52	-78.05	-85.89

Earth Gen-Biofuel ROC % Calculation

Earth Gen-Biofuel's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2015 is calculated as:

	ROC % (A: Dec. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2014 )	+	Invested Capital (A: Dec. 2015 ))	/ count )
=	-0.521 * ( 1 - 0% )	/	( (0.428	+	0.286)	/ 2 )
=	-0.521	/	0.357
=	-145.94 %

where

	Invested Capital		(A: Dec. 2014 )
=	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	))
=	0.573	-	0.143	-	( 0.002	-	max(0, 0.184	-	0.553	+	0.002	))
=	0.428

	Invested Capital		(A: Dec. 2015 )
=	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	))
=	0.412	-	0.125	-	( 0.001	-	max(0, 0.227	-	0.396	+	0.001	))
=	0.286

Earth Gen-Biofuel's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2016 is calculated as:

	ROC % (Q: Jun. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2016 )	+	Invested Capital (Q: Jun. 2016 ))	/ count )
=	-0.752 * ( 1 - 0% )	/	( (0.862	+	0.889)	/ 2 )
=	-0.752	/	0.8755
=	-85.89 %

where

	Invested Capital		(Q: Mar. 2016 )
=	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	))
=	1.028	-	0.144	-	( 0.022	-	max(0, 0.29	-	0.388	+	0.022	))
=	0.862

	Invested Capital		(Q: Jun. 2016 )
=	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	))
=	1	-	0.084	-	( 0.027	-	max(0, 0.117	-	0.365	+	0.027	))
=	0.889

Note: The Operating Income data used here is four times the quarterly (Jun. 2016) data.

Earth Gen-Biofuel (OTCPK:EGBB) 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, Earth Gen-Biofuel's WACC % is 0.00%. Earth Gen-Biofuel's ROC % is 0.00% (calculated using TTM income statement data). Earth Gen-Biofuel 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.

Earth Gen-Biofuel ROC % Related Terms

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Earth Gen-Biofuel (Earth Gen-Biofuel) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Homebuilding & Construction » Earth Gen-Biofuel Inc (OTCPK:EGBB) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

1375 Front Street NE, Salem, OR, USA, 97301

Website

https://earthgenbiofuel.com

Earth Gen-Biofuel Inc is engaged in the manufacturing of Park Model RV's. Park Model RVs are manufactured homes that are built to qualify as an RV for building regulations but are constructed as permanently placed homes. The company develops plans for homes that could serve the need for residents for the unsheltered housing crisis in many cities through utilizing technology to construct affordable living units.