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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 %. iRhythm Technologies's annualized return on capital (ROC %) for the quarter that ended in Dec. 2024 was -6.01%.
As of today (2025-03-14), iRhythm Technologies's WACC % is 11.96%. iRhythm Technologies's ROC % is -41.86% (calculated using TTM income statement data). iRhythm Technologies earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for iRhythm Technologies'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.
iRhythm Technologies Annual Data | |||||||||||||||||||||
Trend | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | Dec24 | |||||||||||
ROC % | Get a 7-Day Free Trial |
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-29.22 | -59.03 | -48.42 | -57.62 | -43.82 |
iRhythm Technologies Quarterly Data | ||||||||||||||||||||
Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | Dec24 | |
ROC % | Get a 7-Day Free Trial |
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-50.45 | -62.70 | -34.12 | -67.96 | -6.01 |
iRhythm Technologies's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2024 is calculated as:
ROC % (A: Dec. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2023 ) | + | Invested Capital (A: Dec. 2024 )) | / count ) |
= | -114.864 * ( 1 - -0.5% ) | / | ( (221.834 | + | 305.014) | / 2 ) |
= | -115.43832 | / | 263.424 | |||
= | -43.82 % |
where
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 | )) |
= | 433.144 | - | 87.868 | - | ( 133.764 | - | max(0, 107.37 | - | 230.812 | + | 133.764 | )) |
= | 221.834 |
Invested Capital | (A: Dec. 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 | )) |
= | 931.449 | - | 91.536 | - | ( 535.553 | - | max(0, 110.92 | - | 645.819 | + | 535.553 | )) |
= | 305.014 |
iRhythm Technologies's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2024 is calculated as:
ROC % (Q: Dec. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Sep. 2024 ) | + | Invested Capital (Q: Dec. 2024 )) | / count ) |
= | -16.332 * ( 1 - -12.77% ) | / | ( (308.069 | + | 305.014) | / 2 ) |
= | -18.4175964 | / | 306.5415 | |||
= | -6.01 % |
where
Invested Capital | (Q: Sep. 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 | )) |
= | 909.688 | - | 79.588 | - | ( 522.031 | - | max(0, 100.104 | - | 627.909 | + | 522.031 | )) |
= | 308.069 |
Invested Capital | (Q: Dec. 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 | )) |
= | 931.449 | - | 91.536 | - | ( 535.553 | - | max(0, 110.92 | - | 645.819 | + | 535.553 | )) |
= | 305.014 |
Note: The Operating Income data used here is four times the quarterly (Dec. 2024) 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.
iRhythm Technologies (NAS:IRTC) 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, iRhythm Technologies's WACC % is 11.96%. iRhythm Technologies's ROC % is -41.86% (calculated using TTM income statement data). iRhythm Technologies 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 iRhythm Technologies's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Patrick Michael Murphy | officer: CLO & EVP RA/QA MrktAcs & Gov | 6340 SEQUENCE DRIVE, SAN DIEGO CA 92121 |
Quentin S. Blackford | director, officer: President and CEO | 7475 LUSK BLVD., SAN DIEGO CA 92121 |
Abhijit Y Talwalkar | director | ONE AMD PLACE, PO BOX 3453, SUNNYVALE CA 94088 |
Brice Bobzien | officer: Chief Financial Officer | C/O IRHYTHM TECHNOLOGIES, INC., 699 8TH ST #600, SAN FRANCISCO CA 94103 |
Mervin Smith | officer: EVP Strategic Business Ops | C/O IRHYTHM TECHNOLOGIES, INC., 699 8TH ST #600, SAN FRANCISCO CA 94103 |
Chad Patterson | officer: Chief Commercial Officer | 6340 SEQUENCE DRIVE, SAN DIEGO CA 92121 |
Minang Turakhia | officer: EVP, CMO & CSO | C/O IRHYTHM TECHNOLOGIES, INC., 699 8TH ST #600, SAN FRANCISCO CA 94103 |
Marc W. Rosenbaum | officer: Chief Accounting Officer | 7475 LUSK BLVD., SAN DIEGO CA 92121 |
Sumi Shrishrimal | officer: EVP, Chief Risk Officer | 6340 SEQUENCE DRIVE, SAN DIEGO CA 92121 |
Daniel G. Wilson | officer: EVP, Strategy Corp Dev Inv Rel | 699 8TH STREET, SUITE 600, SAN FRANCISCO CA 94103 |
Mark J. Day | officer: EVP, Research & Development | C/O IRHYTHM TECHNOLOGIES, INC., 650 TOWNSEND STREET, SUITE 500, SAN FRANCISCO CA 94103 |
Mojdeh Poul | director | 3M COMPANY OFFICE OF GENERAL COUNSEL, 3M CENTER, ST PAUL MN 55144-1000 |
Brian B Yoor | director | 100 ABBOTT PARK ROAD, AP6A-2, D-032L, ABBOTT PARK IL 60064 |
Douglas Devine | officer: Chief Financial Officer | C/O IRHYTHM TECHNOLOGIES, INC., 699 8TH STREET, SUITE 600, SAN FRANCISCO CA 94103 |
Bairey Merz Cathleen Noel | director | 16664 CUMBRE VERDE COURT, PACIFIC PALISADES CA 90272 |
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