GSPRF (Golden Spike Resources) ROC % : -10.68% (As of May. 2024)

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What is Golden Spike Resources 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 %. Golden Spike Resources's annualized return on capital (ROC %) for the quarter that ended in May. 2024 was -10.68%.

As of today (2024-12-14), Golden Spike Resources's WACC % is 2.77%. Golden Spike Resources's ROC % is -14.07% (calculated using TTM income statement data). Golden Spike Resources earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Golden Spike Resources ROC % Historical Data

The historical data trend for Golden Spike Resources'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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Golden Spike Resources ROC % Chart

Golden Spike Resources Annual Data

Trend

Aug20

Aug21

Aug22

Aug23

ROC %

-202.96

-29.75

-28.88

Golden Spike Resources Quarterly Data
	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24	May24
ROC %	Get a 7-Day Free Trial										-20.04	-26.26	-9.12	-10.37	-10.68

Golden Spike Resources ROC % Calculation

Golden Spike Resources's annualized Return on Capital (ROC %) for the fiscal year that ended in Aug. 2023 is calculated as:

	ROC % (A: Aug. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Aug. 2022 )	+	Invested Capital (A: Aug. 2023 ))	/ count )
=	-0.798 * ( 1 - 0% )	/	( (2.48	+	3.046)	/ 2 )
=	-0.798	/	2.763
=	-28.88 %

where

	Invested Capital		(A: Aug. 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	))
=	3.682	-	0.123	-	( 1.167	-	max(0, 0.123	-	1.202	+	1.167	))
=	2.48

	Invested Capital		(A: Aug. 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	))
=	3.192	-	0.045	-	( 0.125	-	max(0, 0.045	-	0.146	+	0.125	))
=	3.046

Golden Spike Resources's annualized Return on Capital (ROC %) for the quarter that ended in May. 2024 is calculated as:

	ROC % (Q: May. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Feb. 2024 )	+	Invested Capital (Q: May. 2024 ))	/ count )
=	-0.328 * ( 1 - 0% )	/	( (3.087	+	3.055)	/ 2 )
=	-0.328	/	3.071
=	-10.68 %

where

	Invested Capital		(Q: Feb. 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	))
=	3.261	-	0.004	-	( 0.17	-	max(0, 0.004	-	0.194	+	0.17	))
=	3.087

	Invested Capital		(Q: May. 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	))
=	3.137	-	0.002	-	( 0.08	-	max(0, 0.002	-	0.097	+	0.08	))
=	3.055

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

Golden Spike Resources (OTCPK:GSPRF) 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, Golden Spike Resources's WACC % is 2.77%. Golden Spike Resources's ROC % is -14.07% (calculated using TTM income statement data). Golden Spike Resources 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.

Golden Spike Resources ROC % Related Terms

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Golden Spike Resources Business Description

Industry

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GLDS:Canada

Address

830 - 1100 Melville Street, Vancouver, BC, CAN, V6E 4A6

Website

https://www.goldenspikeresources.com

Golden Spike Resources Corp is a mineral exploration company and its principal business is the acquisition and exploration of mineral properties with a focus on Canada. The company's property is the Camping Lake Project, consisting of five contiguous mineral claims covering an area of approximately 2,132.4 Ha northwest of Ear Falls in the Province of Ontario.