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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 %. MSP Recovery's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -15.07%.
As of today (2025-03-14), MSP Recovery's WACC % is 55.30%. MSP Recovery's ROC % is -16.38% (calculated using TTM income statement data). MSP Recovery earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for MSP Recovery'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.
MSP Recovery Annual Data | |||||||||
Trend | Dec20 | Dec21 | Dec22 | Dec23 | |||||
ROC % | -101.15 | -15.59 | -18.72 | -16.94 |
MSP Recovery Quarterly Data | |||||||||||||||
Dec20 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | |
ROC % | Get a 7-Day Free Trial |
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-16.24 | -17.66 | -16.73 | -17.93 | -15.07 |
MSP Recovery'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 ) |
= | -559.87 * ( 1 - 0% ) | / | ( (3453.514 | + | 3157.668) | / 2 ) |
= | -559.87 | / | 3305.591 | |||
= | -16.94 % |
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 | )) |
= | 3417.945 | - | 28.789 | - | ( 3.661 | - | max(0, 115.715 | - | 51.357 | + | 3.661 | )) |
= | 3453.514 |
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 | )) |
= | 3159.995 | - | 26.887 | - | ( 11.633 | - | max(0, 46.506 | - | 21.946 | + | 11.633 | )) |
= | 3157.668 |
MSP Recovery's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:
ROC % (Q: Sep. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Jun. 2024 ) | + | Invested Capital (Q: Sep. 2024 )) | / count ) |
= | -519.484 * ( 1 - 0% ) | / | ( (2952.864 | + | 3939.364) | / 2 ) |
= | -519.484 | / | 3446.114 | |||
= | -15.07 % |
where
Invested Capital | (Q: Jun. 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 | )) |
= | 2909.274 | - | 33.804 | - | ( 7.113 | - | max(0, 90.488 | - | 13.094 | + | 7.113 | )) |
= | 2952.864 |
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 | )) |
= | 2787.852 | - | 43.722 | - | ( 4.746 | - | max(0, 1205.994 | - | 10.76 | + | 4.746 | )) |
= | 3939.364 |
Note: The Operating Income data used here is four times the quarterly (Sep. 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.
MSP Recovery (NAS:MSPR) 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, MSP Recovery's WACC % is 55.30%. MSP Recovery's ROC % is -16.38% (calculated using TTM income statement data). MSP Recovery 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 MSP Recovery's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
John Hasan Ruiz | director, 10 percent owner, officer: Chief Executive Officer | C/O MSP RECOVERY, 2701 S LE JEUNE ROAD, 10TH FLOOR, CORAL GABLES FL 33134-5809 |
Cano Health, Inc. | 10 percent owner | 9725 NW 117TH AVENUE, SUITE 200, MIAMI FL 33178 |
Frank Carlos Quesada | director, 10 percent owner, officer: See Remarks | C/O MSP RECOVERY, 2701 S LE JEUNE ROAD, 10TH FLOOR, CORAL GABLES FL 33134-5809 |
Ricardo Rivera | officer: See Remarks | C/O MSP RECOVERY, 2701 S LE JEUNE ROAD, 10TH FLOOR, CORAL GABLES FL 33134-5809 |
Nomura Securities International Inc | 10 percent owner | WORLDWIDE PLAZA, 309 WEST 49TH STREET, NEW YORK NY 10019 |
Calvin Hamstra | officer: Chief Financial Officer | 2701 S LE JEUNE ROAD, 10TH FLOOR, CORAL GABLES FL 33134-5809 |
Alexandra Marie Plasencia | officer: General Counsel | C/O MSP RECOVERY, 2701 S LE JEUNE ROAD, 10TH FLOOR, CORAL GABLES FL 33134-5809 |
Thomas W Hawkins | director | GERALD STEVENS INC, PO BOX 350526, FORT LAUDERDALE FL 33335-0526 |
Ophir Sternberg | director, 10 percent owner | C/O OPES ACQUISITION CORP., JAVIER BARROS SIERRA 540, OF. 103, MEXICO CITY O5 01210 |
Michael Frederick Arrigo | director | 2701 S LE JEUNE ROAD, 10TH FLOOR, CORAL GABLES FL 33134-5809 |
Nomura Holdings Inc | 10 percent owner | 1-13-1 NIHONBASHI, CHUO-KU, TOKYO M0 103-8645 |
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