Orion Office REIT (FRA:OY9) ROC % : -0.53% (As of Sep. 2024)

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What is Orion Office REIT 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 %. Orion Office REIT's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -0.53%.

As of today (2024-12-14), Orion Office REIT's WACC % is 7.86%. Orion Office REIT's ROC % is -1.47% (calculated using TTM income statement data). Orion Office REIT earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Orion Office REIT ROC % Historical Data

The historical data trend for Orion Office REIT'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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Orion Office REIT ROC % Chart

Orion Office REIT Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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3.15

3.30

1.32

-0.04

0.41

Orion Office REIT Quarterly Data
	Dec18	Dec19	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															0.57	-0.59	0.49	-5.45	-0.53

Orion Office REIT ROC % Calculation

Orion Office REIT's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	5.894 * ( 1 - -0.8% )	/	( (1570.938	+	1335.844)	/ 2 )
=	5.941152	/	1453.391
=	0.41 %

where

	Invested Capital		(A: Dec. 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	))
=	1483.093	-	30.043	-	( 19.482	-	max(0, 194.124	-	76.236	+	19.482	))
=	1570.938

	Invested Capital		(A: 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	))
=	1305.747	-	33.064	-	( 20.608	-	max(0, 139.436	-	76.275	+	20.608	))
=	1335.844

Orion Office REIT's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	-6.652 * ( 1 - -0.74% )	/	( (1265.446	+	1279.315)	/ 2 )
=	-6.7012248	/	1272.3805
=	-0.53 %

where

	Invested Capital		(Q: Jun. 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	))
=	1244.723	-	30.226	-	( 22.504	-	max(0, 129.629	-	78.68	+	22.504	))
=	1265.446

	Invested Capital		(Q: Sep. 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	))
=	1233.353	-	34.087	-	( 14.924	-	max(0, 151.217	-	71.168	+	14.924	))
=	1279.315

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

Orion Office REIT (FRA:OY9) 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, Orion Office REIT's WACC % is 7.86%. Orion Office REIT's ROC % is -1.47% (calculated using TTM income statement data). Orion Office REIT 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.

Orion Office REIT ROC % Related Terms

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Orion Office REIT Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Orion Office REIT Inc (FRA:OY9) » Definitions » ROC %

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ONL:USA

Address

2398 East Camelback Road, Suite 1060, Phoenix, AZ, USA, 85016

Website

https://www.onlreit.com

Orion Office REIT Inc is a internally-managed REIT engaged in the ownership, acquisition, and management of a diversified portfolio of mission-critical and headquarters office buildings located in high quality suburban markets across the U.S. and leased on a single-tenant net lease basis to creditworthy clients. The portfolio of the company includes traditional office buildings, governmental offices, medical offices, laboratories, and others. The Company operates in one business segment: direct ownership and operation of commercial real estate.

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