Firma Holdings (Firma Holdings) ROC % : -27.98% (As of Jun. 2015)

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What is Firma Holdings 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 %. Firma Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2015 was -27.98%.

As of today (2024-06-23), Firma Holdings's WACC % is 0.00%. Firma Holdings's ROC % is 0.00% (calculated using TTM income statement data). Firma Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Firma Holdings ROC % Historical Data

The historical data trend for Firma Holdings'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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Firma Holdings ROC % Chart

Firma Holdings Annual Data

Trend

Oct06

Oct07

Oct08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

ROC %

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-126.31

-30.67

-46.37

-184.24

-37.02

Firma Holdings Quarterly Data
	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15
ROC %	Get a 7-Day Free Trial															-41.15	-34.08	-30.17	-26.29	-27.98

Firma Holdings ROC % Calculation

Firma Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2014 is calculated as:

	ROC % (A: Dec. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2013 )	+	Invested Capital (A: Dec. 2014 ))	/ count )
=	-3.34 * ( 1 - 0% )	/	( (6.809	+	11.237)	/ 2 )
=	-3.34	/	9.023
=	-37.02 %

where

	Invested Capital		(A: Dec. 2013 )
=	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	))
=	7.66	-	2.928	-	( 0.077	-	max(0, 3.042	-	0.965	+	0.077	))
=	6.809

	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	))
=	11.004	-	1.68	-	( 0.739	-	max(0, 4.064	-	2.151	+	0.739	))
=	11.237

Firma Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2015 is calculated as:

	ROC % (Q: Jun. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2015 )	+	Invested Capital (Q: Jun. 2015 ))	/ count )
=	-4.04 * ( 1 - 0% )	/	( (11.102	+	17.773)	/ 2 )
=	-4.04	/	14.4375
=	-27.98 %

where

	Invested Capital		(Q: Mar. 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	))
=	11.602	-	1.728	-	( 0.081	-	max(0, 4.053	-	2.825	+	0.081	))
=	11.102

	Invested Capital		(Q: Jun. 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	))
=	16.253	-	3.079	-	( 0.294	-	max(0, 7.553	-	2.954	+	0.294	))
=	17.773

Note: The Operating Income data used here is four times the quarterly (Jun. 2015) data.

Firma Holdings (OTCPK:FRMA) 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, Firma Holdings's WACC % is 0.00%. Firma Holdings's ROC % is 0.00% (calculated using TTM income statement data). Firma Holdings 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.

Firma Holdings ROC % Related Terms

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Firma Holdings (Firma Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Firma Holdings Corp (OTCPK:FRMA) » Definitions » ROC %

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Address

4915 Main Street, 2nd Floor, Suite 3, Downers Grove, IL, USA, 60515

Website

https://www.firmaholdingscorp.com

Firma Holdings Corp operates in the mining and consumer product sales business. In addition, it also sells personal protection equipment (commonly referred to as "PPE"), and household and consumer products with its existing joint venture partners as well as participates as a procurement agent for both commercial and government entities.