Critical Metals (LSE:CRTM) ROC % : -46.30% (As of Jun. 2024)

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What is Critical Metals 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 %. Critical Metals's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -46.30%.

As of today (2024-12-11), Critical Metals's WACC % is 16.23%. Critical Metals's ROC % is -42.28% (calculated using TTM income statement data). Critical Metals earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Critical Metals ROC % Historical Data

The historical data trend for Critical Metals'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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Critical Metals ROC % Chart

Critical Metals Annual Data

Trend

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

ROC %

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-1,248.72

-89.50

-38.84

Critical Metals Semi-Annual Data
	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial							-1,264.94	-285.84	-64.30	-41.72	-46.30

Critical Metals ROC % Calculation

Critical Metals's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2024 is calculated as:

	ROC % (A: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2023 )	+	Invested Capital (A: Jun. 2024 ))	/ count )
=	-2.587 * ( 1 - 0% )	/	( (5.483	+	7.839)	/ 2 )
=	-2.587	/	6.661
=	-38.84 %

where

	Invested Capital		(A: 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	))
=	4.685	-	0.858	-	( 0.412	-	max(0, 2.334	-	0.678	+	0.412	))
=	5.483

	Invested Capital		(A: 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	))
=	4.575	-	1.199	-	( 0.061	-	max(0, 4.594	-	0.131	+	0.061	))
=	7.839

Critical Metals's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-2.98 * ( 1 - 0% )	/	( (5.034	+	7.839)	/ 2 )
=	-2.98	/	6.4365
=	-46.30 %

where

	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	))
=	4.418	-	2.169	-	( 0.066	-	max(0, 2.992	-	0.207	+	0.066	))
=	5.034

	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	))
=	4.575	-	1.199	-	( 0.061	-	max(0, 4.594	-	0.131	+	0.061	))
=	7.839

Note: The Operating Income data used here is two times the semi-annual (Jun. 2024) data.

Critical Metals (LSE:CRTM) 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, Critical Metals's WACC % is 16.23%. Critical Metals's ROC % is -42.28% (calculated using TTM income statement data). Critical Metals 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.

Critical Metals ROC % Related Terms

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Critical Metals Business Description

Industry

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CRTMF:USA 67K:Germany

Address

20 Primrose Street, The Broadgate Tower 7th Floor, London, GBR, EC2A 2EW

Website

https://www.criticalmetals.co.uk

Critical Metals PLC is a mining investment company. The company looks to identify potential companies, businesses, or assets that have operations in the natural resources exploration, development, and production sector. It has two reportable segments, Mining and Corporate. The Mining segment is presented as an aggregate of all the DRC related activity and the associated Mauritian holding companies. The corporate segment is the UK head company and the costs in respect of managing the Group. This includes the cost of director share options granted by the company.

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