Empire Metals (LSE:EEE) ROC % : -58.46% (As of Jun. 2023)

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What is Empire 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 %. Empire Metals's annualized return on capital (ROC %) for the quarter that ended in Jun. 2023 was -58.46%.

As of today (2024-06-10), Empire Metals's WACC % is 17.57%. Empire Metals's ROC % is -43.32% (calculated using TTM income statement data). Empire Metals earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Empire Metals ROC % Historical Data

The historical data trend for Empire 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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Empire Metals ROC % Chart

Empire Metals Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

ROC %

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-18.60

-344.71

-127.53

-123.14

-39.10

Empire Metals Semi-Annual Data
	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23
ROC %	Get a 7-Day Free Trial															-138.67	-76.88	-53.44	-26.17	-58.46

Empire Metals ROC % Calculation

Empire Metals'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 )
=	-1.047 * ( 1 - -0.09% )	/	( (1.986	+	3.375)	/ 2 )
=	-1.0479423	/	2.6805
=	-39.10 %

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	))
=	4.25	-	0.091	-	( 2.21	-	max(0, 0.125	-	2.298	+	2.21	))
=	1.986

	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	))
=	4.876	-	0.074	-	( 1.468	-	max(0, 0.11	-	1.537	+	1.468	))
=	3.375

Empire Metals'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: Dec. 2022 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	-2.074 * ( 1 - -0.1% )	/	( (3.375	+	3.727)	/ 2 )
=	-2.076074	/	3.551
=	-58.46 %

where

	Invested Capital		(Q: 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	))
=	4.876	-	0.074	-	( 1.468	-	max(0, 0.11	-	1.537	+	1.468	))
=	3.375

	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	))
=	5.387	-	0.256	-	( 1.405	-	max(0, 0.256	-	1.66	+	1.405	))
=	3.727

Note: The Operating Income data used here is two times the semi-annual (Jun. 2023) data.

Empire Metals (LSE:EEE) 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, Empire Metals's WACC % is 17.57%. Empire Metals's ROC % is -43.32% (calculated using TTM income statement data). Empire 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.

Empire Metals ROC % Related Terms

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Empire Metals (LSE:EEE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Empire Metals Ltd (LSE:EEE) » Definitions » ROC %

Comparable Companies

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EEE.GB:UK NOGN:Germany

Address

Craigmuir Chambers, PO Box 71, Road Town, Tortola, VGB, VG1110

Website

https://www.empiremetals.co.uk

Empire Metals Ltd is an exploration and resource development company with a project portfolio comprising gold interests in Australia and Austria. The company develops a pipeline of projects with its main focus on the high-grade Eclipse and Gindalbie Gold Projects in Western Australia. The company's project portfolio includes the Pitfield Copper-Gold Project and the Walton Copper-Gold Project in Western Australia and the Stavely Copper-Gold Project in the Stavely Arc region of Victoria. It has a high-grade gold exploration portfolio in Austria which includes Rotgulden, Schonberg and Walchen prospects.

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