Healthwell Acquisition I (Healthwell Acquisition I) ROC % : -4.05% (As of Jun. 2023)

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What is Healthwell Acquisition I 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 %. Healthwell Acquisition I's annualized return on capital (ROC %) for the quarter that ended in Jun. 2023 was -4.05%.

As of today (2024-06-05), Healthwell Acquisition I's WACC % is 10.12%. Healthwell Acquisition I's ROC % is -0.58% (calculated using TTM income statement data). Healthwell Acquisition I earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Healthwell Acquisition I ROC % Historical Data

The historical data trend for Healthwell Acquisition I'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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Healthwell Acquisition I ROC % Chart

Healthwell Acquisition I Annual Data

Trend

Dec21

Dec22

ROC %

-0.60

Healthwell Acquisition I Quarterly Data
	Jan21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23
ROC %	Get a 7-Day Free Trial					-0.50	6.61	-0.47	-0.27	-4.05

Healthwell Acquisition I ROC % Calculation

Healthwell Acquisition I's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	-1.624 * ( 1 - 6.24% )	/	( (250.515	+	253.669)	/ 2 )
=	-1.5226624	/	252.092
=	-0.60 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	251.542	-	0.278	-	( 0.749	-	max(0, 0.278	-	1.239	+	0.749	))
=	250.515

	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	))
=	254.137	-	0.928	-	( 0.138	-	max(0, 0.928	-	0.468	+	0.138	))
=	253.669

Healthwell Acquisition I's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2023 is calculated as:

	ROC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	-4.98 * ( 1 - -109.24% )	/	( (255.867	+	259.171)	/ 2 )
=	-10.420152	/	257.519
=	-4.05 %

where

	Invested Capital		(Q: Mar. 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	))
=	256.102	-	1.081	-	( 0.035	-	max(0, 1.122	-	0.276	+	0.035	))
=	255.867

	Invested Capital		(Q: Jun. 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	))
=	259.049	-	2.387	-	( 0.047	-	max(0, 2.664	-	0.155	+	0.047	))
=	259.171

Note: The Operating Income data used here is four times the quarterly (Jun. 2023) data.

Healthwell Acquisition I (NAS:HWEL) 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, Healthwell Acquisition I's WACC % is 10.12%. Healthwell Acquisition I's ROC % is -0.58% (calculated using TTM income statement data). Healthwell Acquisition I 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.

Healthwell Acquisition I ROC % Related Terms

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Healthwell Acquisition I (Healthwell Acquisition I) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Diversified Financial Services » Healthwell Acquisition Corp I (NAS:HWEL) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

1001 Green Bay Road, Suite 227, Winnetka, IL, USA, 60093

Website

https://www.healthwellspac.com

Healthwell Acquisition Corp I is a blank check company.

Executives

Ellen Levy	director	C/O INSTRUCTURE, INC., 6330 SOUTH 3000 EAST, SUITE 700, SALT LAKE CITY UT 84121
George R Hornig	director	625 MADISON AVE SUITE 10-B, NEW YORK NY 10017
Christie Hefner	director	PLAYBOY ENT., INC. - H. SHAPIRO, 680 N. LAKE SHORE DRIVE, CHICAGO IL 60611
John L Maccarthy	director, 10 percent owner	333 WEST WACKER DRIVE, C/O NUVEEN INVESTMENTS, CHICAGO IL 60606
Healthwell Acquisition Corp. I Sponsor Llc	10 percent owner	1001 GREEN BAY RD. #227, WINNETKA IL 60093
Alyssa Rapp	director, 10 percent owner, officer: Chief Executive Officer	C/O HEALTHWELL ACQUISITION CORP. I, 1001 GREEN BAY RD., #227, WINNETKA IL 60093
Curtis Feeny	director	C/O HEALTHWELL ACQUISITION CORP. I, 1001 GREEN BAY RD., #227, WINNETKA IL 60093
Carl Allegretti	director	C/O HEALTHWELL ACQUISITION CORP. I, 1001 GREEN BAY RD., #227, WINNETKA IL 60093
Tracy Wan	director, officer: Chief Financial Officer	C/O HEALTHWELL ACQUISITION CORP. I, 1001 GREEN BAY RD., #227, WINNETKA IL 60093
Matt Wandoloski	director	C/O HEALTHWELL ACQUISITION CORP. I, 1001 GREEN BAY RD., #227, WINNETKA IL 60093