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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Hepion Pharmaceuticals's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -1,044.85%.
As of today (2024-05-01), Hepion Pharmaceuticals's WACC % is 14.41%. Hepion Pharmaceuticals's ROC % is -980.72% (calculated using TTM income statement data). Hepion Pharmaceuticals earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Hepion Pharmaceuticals'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.
Hepion Pharmaceuticals Annual Data | |||||||||||||||||||||
Trend | Jun14 | Jun15 | Jun16 | Jun17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
ROC % | Get a 7-Day Free Trial | -104.66 | -315.75 | -351.83 | -478.43 | -1,249.68 |
Hepion Pharmaceuticals Quarterly Data | ||||||||||||||||||||
Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
ROC % | Get a 7-Day Free Trial | -441.94 | -786.31 | -987.35 | -1,023.51 | -1,044.85 |
Hepion Pharmaceuticals'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 ) |
= | -45.258 * ( 1 - 0.83% ) | / | ( (6.075 | + | 1.108) | / 2 ) |
= | -44.8823586 | / | 3.5915 | |||
= | -1,249.68 % |
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 | )) |
= | 60.244 | - | 5.559 | - | ( 51.189 | - | max(0, 7.886 | - | 56.496 | + | 51.189 | )) |
= | 6.075 |
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 | )) |
= | 18.094 | - | 4.788 | - | ( 14.786 | - | max(0, 5.29 | - | 17.488 | + | 14.786 | )) |
= | 1.108 |
Hepion Pharmaceuticals's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:
ROC % (Q: Dec. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Sep. 2023 ) | + | Invested Capital (Q: Dec. 2023 )) | / count ) |
= | -28.876 * ( 1 - 3.57% ) | / | ( (4.222 | + | 1.108) | / 2 ) |
= | -27.8451268 | / | 2.665 | |||
= | -1,044.85 % |
where
Invested Capital | (Q: 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 | )) |
= | 25.003 | - | 5.914 | - | ( 19.284 | - | max(0, 6.402 | - | 21.269 | + | 19.284 | )) |
= | 4.222 |
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 | )) |
= | 18.094 | - | 4.788 | - | ( 14.786 | - | max(0, 5.29 | - | 17.488 | + | 14.786 | )) |
= | 1.108 |
Note: The Operating Income data used here is four times the quarterly (Dec. 2023) 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.
Hepion Pharmaceuticals (NAS:HEPA) 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, Hepion Pharmaceuticals's WACC % is 14.41%. Hepion Pharmaceuticals's ROC % is -980.72% (calculated using TTM income statement data). Hepion Pharmaceuticals 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.
Thank you for viewing the detailed overview of Hepion Pharmaceuticals's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Peter Wijngaard | director | 8 SYLVAN WAY, PARSIPPANY NJ 07054 |
Robert T Foster | officer: Chief Scientific Officer | C/O CONTRAVIR PHARMACEUTICALS, INC., 399 THORNALL STREET, FIRST FLOOR, EDISON NJ 08837 |
Kaouthar Lbiati | director | 399 THORNALL STREET, FIRST FLOOR, EDISON NJ 08837 |
Anand Reddi | director | 399 THORNALL STREET, FIRST FLOOR, EDISON NJ 08837 |
John T Cavan | officer: Chief Financial Officer | C/O STEMLINE THERAPEUTICS, INC., 750 LEXINGTON AVENUE, 6TH FLOOR, NEW YORK NY 10022 |
John P Brancaccio | director | C/O TAMIR BIOTECHNOLOGY, INC., 11 DEER PARK DRIVE, SUITE 204, MONMOUTH JUNCTION NJ 08852 |
Gary S Jacob | director, officer: CEO and President | |
Donald E Garlikov | 10 percent owner | 41 S. HIGH STREET, SUITE 3400, COLUMBUS OH 43215 |
Tamar D Howson | director | |
Thomas Phd Adams | director | |
Gabriel Cerrone | 10 percent owner | VIA SANT' ANDREA 18, MILAN L6 20121 |
John Z Sullivan-bolyai | officer: Chief Medical Officer | C/O CONTRAVIR PHARMACEUTICALS, INC., 399 THORNALL STREET, 1ST FLOOR, EDISON NJ 08837 |
James Sapirstein | director, officer: Chief Executive Officer | 1517 SAN JACINTO, HOUSTON TX 77002 |
Arnold Lippa | director | C/O AURORA CAPITAL, LLC, 17 PARK AVENUE, #201, NEW YORK NY 10016 |
William Karl Hornung | officer: Chief Financial Officer | C/O CONTRAVIR PHARMACEUTICALS, INC., 420 LEXINGTON AVE., SUITE 300, NEW YORK NY 10170 |
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