Prime Focus London (LSE:PFO) ROC % : -3.61% (As of Mar. 2013)

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What is Prime Focus London 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 %. Prime Focus London's annualized return on capital (ROC %) for the quarter that ended in Mar. 2013 was -3.61%.

As of today (2024-09-21), Prime Focus London's WACC % is 0.00%. Prime Focus London's ROC % is 0.00% (calculated using TTM income statement data). Prime Focus London earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Prime Focus London ROC % Historical Data

The historical data trend for Prime Focus London'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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Prime Focus London ROC % Chart

Prime Focus London Annual Data

Trend

Aug03

Aug04

Aug05

Aug06

Mar08

Mar09

Mar10

Mar11

Mar12

Mar13

ROC %

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-36.49

-2.04

19.08

-4.28

-3.59

Prime Focus London Semi-Annual Data
	Feb03	Aug03	Feb04	Aug04	Feb05	Aug05	Feb06	Aug06	Sep07	Mar08	Sep08	Mar09	Sep09	Mar10	Sep10	Mar11	Sep11	Mar12	Sep12	Mar13
ROC %	Get a 7-Day Free Trial															10.64	8.96	-14.75	-3.25	-3.61

Prime Focus London ROC % Calculation

Prime Focus London's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2013 is calculated as:

	ROC % (A: Mar. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2012 )	+	Invested Capital (A: Mar. 2013 ))	/ count )
=	-1.028 * ( 1 - -13.25% )	/	( (34.302	+	30.631)	/ 2 )
=	-1.16421	/	32.4665
=	-3.59 %

where

	Invested Capital		(A: Mar. 2012 )
=	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	))
=	44.259	-	17.043	-	( 1.228	-	max(0, 35.069	-	27.983	+	1.228	))
=	34.302

	Invested Capital		(A: Mar. 2013 )
=	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	))
=	29.755	-	4.097	-	( 0.586	-	max(0, 20.982	-	16.009	+	0.586	))
=	30.631

Prime Focus London's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2013 is calculated as:

	ROC % (Q: Mar. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2012 )	+	Invested Capital (Q: Mar. 2013 ))	/ count )
=	-0.992 * ( 1 - -12.36% )	/	( (31.093	+	30.631)	/ 2 )
=	-1.1146112	/	30.862
=	-3.61 %

where

	Invested Capital		(Q: Sep. 2012 )
=	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	))
=	35.574	-	10.51	-	( 0.173	-	max(0, 24.703	-	18.674	+	0.173	))
=	31.093

	Invested Capital		(Q: Mar. 2013 )
=	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	))
=	29.755	-	4.097	-	( 0.586	-	max(0, 20.982	-	16.009	+	0.586	))
=	30.631

Note: The Operating Income data used here is two times the semi-annual (Mar. 2013) data.

Prime Focus London (LSE:PFO) 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, Prime Focus London's WACC % is 0.00%. Prime Focus London's ROC % is 0.00% (calculated using TTM income statement data). Prime Focus London 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.

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Prime Focus London Business Description

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Prime Focus London PLC is incorporated and domiciled in England. The company and its subsidiaries are technology based service providers to the media and entertainment industry. It is a part of Prime Focus, providing services to the Film, Broadcast, Commercials, Internet and Media industries. It offers end-to-end solution, from pre-production to final delivery including video and audio post-production, production services and on-set supervision, Digital Intermediate, versioning and adaptation, visual effects and animation.