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European Green Transition (LSE:EGT) ROC % : -69.85% (As of Jun. 2024)


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What is European Green Transition 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 %. European Green Transition's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -69.85%.

As of today (2025-03-17), European Green Transition's WACC % is 9.50%. European Green Transition's ROC % is -53.73% (calculated using TTM income statement data). European Green Transition earns returns that do not match up to its cost of capital. It will destroy value as it grows.


European Green Transition ROC % Historical Data

The historical data trend for European Green Transition'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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European Green Transition ROC % Chart

European Green Transition Annual Data
Trend Dec21 Dec22 Dec23
ROC %
- -75.74 -29.54

European Green Transition Semi-Annual Data
Jun22 Dec22 Jun23 Dec23 Jun24
ROC % - -62.45 -52.50 -24.33 -69.85

European Green Transition ROC % Calculation

European Green Transition'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 )
=-0.559 * ( 1 - 0% )/( (0.269 + 3.516)/ 2 )
=-0.559/1.8925
=-29.54 %

where

European Green Transition'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 )
=-1.808 * ( 1 - 0% )/( (3.516 + 1.661)/ 2 )
=-1.808/2.5885
=-69.85 %

where

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


European Green Transition  (LSE:EGT) 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, European Green Transition's WACC % is 9.50%. European Green Transition's ROC % is -53.73% (calculated using TTM income statement data). European Green Transition 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.


European Green Transition ROC % Related Terms

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European Green Transition Business Description

Traded in Other Exchanges
N/A
Address
The Walbrook Building, 25 Walbrook, London, GBR, EC4N 8AF
European Green Transition PLC is focussed on building a pipeline of high-quality green economy assets in Europe. It aims to acquire high quality projects which are distressed, under-valued and capital restricted. EGT is to build a portfolio of green economy assets within a sustainable, profitable business, focused on generating returns and creating shareholder value.

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