Bayfield Ventures (FRA:B4N) ROC % : -7.62% (As of Jul. 2014)

Bayfield Ventures ROC % Chart

Bayfield Ventures Annual Data
	Trend	Oct04	Oct05	Oct06	Oct07	Oct08	Oct09	Oct10	Oct11	Oct12	Oct13
ROC %		Get a 7-Day Free Trial					-26.35	-	-51.15	-22.23	-15.30

Bayfield Ventures Quarterly Data
	Oct09	Jan10	Apr10	Jul10	Oct10	Jan11	Apr11	Jul11	Oct11	Jan12	Apr12	Jul12	Oct12	Jan13	Apr13	Jul13	Oct13	Jan14	Apr14	Jul14
ROC %	Get a 7-Day Free Trial															-5.10	-5.83	-4.03	-4.92	-7.62

Bayfield Ventures ROC % Calculation

Bayfield Ventures's annualized Return on Capital (ROC %) for the fiscal year that ended in Oct. 2013 is calculated as:

where

Bayfield Ventures's annualized Return on Capital (ROC %) for the quarter that ended in Jul. 2014 is calculated as:

where

Note: The Operating Income data used here is four times the quarterly (Jul. 2014) data.

* 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.

Bayfield Ventures  (FRA:B4N) 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, Bayfield Ventures's WACC % is 1.99%. Bayfield Ventures's ROC % is -6.29% (calculated using TTM income statement data). Bayfield Ventures 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.

Bayfield Ventures ROC % Related Terms

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Bayfield Ventures (FRA:B4N) Business Description