Legend Power Systems (FRA:XLE1) ROC % : -156.32% (As of Mar. 2024)

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What is Legend Power Systems 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 %. Legend Power Systems's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -156.32%.

As of today (2024-06-08), Legend Power Systems's WACC % is 1.09%. Legend Power Systems's ROC % is -86.43% (calculated using TTM income statement data). Legend Power Systems earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Legend Power Systems ROC % Historical Data

The historical data trend for Legend Power Systems'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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Legend Power Systems ROC % Chart

Legend Power Systems Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

ROC %

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-178.34

-214.50

-242.25

-261.98

-164.92

Legend Power Systems Quarterly Data
	Jun19	Sep19	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															-189.07	-	-	-190.07	-156.32

Legend Power Systems ROC % Calculation

Legend Power Systems'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 )
=	-2.929 * ( 1 - 0% )	/	( (2.013	+	1.539)	/ 2 )
=	-2.929	/	1.776
=	-164.92 %

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	))
=	4.773	-	0.423	-	( 2.337	-	max(0, 0.594	-	4.488	+	2.337	))
=	2.013

	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	))
=	3.621	-	0.347	-	( 1.735	-	max(0, 0.608	-	3.233	+	1.735	))
=	1.539

Legend Power Systems'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 )
=	-2.484 * ( 1 - 0% )	/	( (1.584	+	1.594)	/ 2 )
=	-2.484	/	1.589
=	-156.32 %

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	))
=	2.871	-	0.322	-	( 0.965	-	max(0, 0.598	-	2.52	+	0.965	))
=	1.584

	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	))
=	2.224	-	0.28	-	( 0.35	-	max(0, 0.56	-	1.868	+	0.35	))
=	1.594

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

Legend Power Systems (FRA:XLE1) 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, Legend Power Systems's WACC % is 1.09%. Legend Power Systems's ROC % is -86.43% (calculated using TTM income statement data). Legend Power Systems 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.

Legend Power Systems ROC % Related Terms

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Legend Power Systems (FRA:XLE1) Business Description

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LPSIF:USA LPS:Canada

Address

1480 Frances Street, Vancouver, BC, CAN, V5L 1Y9

Website

https://www.legendpower.com

Legend Power Systems Inc together with its subsidiaries provides electrical energy conservation solutions to commercial and industrial customers in Canada. The Company's principal business activities are the assembly, marketing and sale of a patented device which is the SmartGATE, which enables dynamic power management of an entire commercial or industrial building. Business operating segments are based on geographical location of sale and installation of the SmartGATE products: Legend Power Systems Canada and Legend Power Systems Corp - U.S. Geographically, it derives a majority of revenue from Canada and also has a presence in the United States.

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