HPSIF (Hybrid Power Solutions) ROC % : -258.39% (As of Aug. 2024)

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What is Hybrid Power Solutions 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 %. Hybrid Power Solutions's annualized return on capital (ROC %) for the quarter that ended in Aug. 2024 was -258.39%.

As of today (2024-12-15), Hybrid Power Solutions's WACC % is 13.72%. Hybrid Power Solutions's ROC % is -260.72% (calculated using TTM income statement data). Hybrid Power Solutions earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Hybrid Power Solutions ROC % Historical Data

The historical data trend for Hybrid Power Solutions'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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Hybrid Power Solutions ROC % Chart

Hybrid Power Solutions Annual Data

Trend

May21

May22

May23

May24

ROC %

-85.71

-82.26

-98.63

-233.50

Hybrid Power Solutions Quarterly Data
	May21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24	May24	Aug24
ROC %	Get a 7-Day Free Trial							-104.69	-259.74	-385.15	-186.80	-258.39

Hybrid Power Solutions ROC % Calculation

Hybrid Power Solutions's annualized Return on Capital (ROC %) for the fiscal year that ended in May. 2024 is calculated as:

	ROC % (A: May. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: May. 2023 )	+	Invested Capital (A: May. 2024 ))	/ count )
=	-4.259 * ( 1 - 0% )	/	( (2.475	+	1.173)	/ 2 )
=	-4.259	/	1.824
=	-233.50 %

where

	Invested Capital		(A: May. 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	))
=	2.065	-	1.403	-	( 0.002	-	max(0, 3.345	-	1.532	+	0.002	))
=	2.475

	Invested Capital		(A: 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	))
=	2.669	-	1.246	-	( 0.25	-	max(0, 1.941	-	2.24	+	0.25	))
=	1.173

Hybrid Power Solutions's annualized Return on Capital (ROC %) for the quarter that ended in Aug. 2024 is calculated as:

	ROC % (Q: Aug. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: May. 2024 )	+	Invested Capital (Q: Aug. 2024 ))	/ count )
=	-3.12 * ( 1 - 0% )	/	( (1.173	+	1.242)	/ 2 )
=	-3.12	/	1.2075
=	-258.39 %

where

	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	))
=	2.669	-	1.246	-	( 0.25	-	max(0, 1.941	-	2.24	+	0.25	))
=	1.173

	Invested Capital		(Q: Aug. 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	))
=	2.429	-	1.167	-	( 0.02	-	max(0, 1.897	-	2.018	+	0.02	))
=	1.242

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

Hybrid Power Solutions (OTCPK:HPSIF) 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, Hybrid Power Solutions's WACC % is 13.72%. Hybrid Power Solutions's ROC % is -260.72% (calculated using TTM income statement data). Hybrid Power Solutions 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.

Hybrid Power Solutions ROC % Related Terms

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Hybrid Power Solutions Business Description

Industry

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Traded in Other Exchanges

E092:Germany HPSS:Canada

Address

333 Terminal Avenue, Suite 208, Vancouver, BC, CAN, V6A 4C1

Website

https://www.hybridps.ca

Hybrid Power Solutions Inc is a Canadian clean energy company specializing in producing, developing, and installing direct-to-consumer clean technology products such as portable power packs and stationary energy storage. It mainly designs and manufactures patent-pending portable battery systems and customized energy solutions for a variety of industrial markets, including the mining, railway, public transit, and construction sectors. It also has a franchise network of solar power installers that operate under the Company's trademark and offer the sale and installation of the Company's products. Geographically, the company operates in Canada; Revenue is generated in three geographical markets, being Canada, United States and Netherlands.