Tekmar Group (LSE:TGP) ROC % : -0.07% (As of Mar. 2024)

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What is Tekmar Group 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 %. Tekmar Group's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -0.07%.

As of today (2024-06-05), Tekmar Group's WACC % is 17.76%. Tekmar Group's ROC % is -19.64% (calculated using TTM income statement data). Tekmar Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Tekmar Group ROC % Historical Data

The historical data trend for Tekmar Group'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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Tekmar Group ROC % Chart

Tekmar Group Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Sep22

Sep23

ROC %

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3.80

9.76

4.26

-9.20

-21.72

Tekmar Group Semi-Annual Data
	Mar16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar22	Sep22	Mar23	Sep23	Mar24
ROC %	Get a 7-Day Free Trial									-14.71	-7.09	-5.03	-39.02	-0.07

Tekmar Group ROC % Calculation

Tekmar Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2023 is calculated as:

	ROC % (A: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2022 )	+	Invested Capital (A: Sep. 2023 ))	/ count )
=	-9.29 * ( 1 - -2.03% )	/	( (43.969	+	43.299)	/ 2 )
=	-9.478587	/	43.634
=	-21.72 %

where

	Invested Capital		(A: Sep. 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	))
=	56.941	-	4.476	-	( 8.496	-	max(0, 16.893	-	26.494	+	8.496	))
=	43.969

	Invested Capital		(A: Sep. 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	))
=	53.255	-	4.737	-	( 5.219	-	max(0, 16.938	-	27.08	+	5.219	))
=	43.299

Tekmar Group's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-0.028 * ( 1 - 0% )	/	( (43.299	+	42.229)	/ 2 )
=	-0.028	/	42.764
=	-0.07 %

where

	Invested Capital		(Q: Sep. 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	))
=	53.255	-	4.737	-	( 5.219	-	max(0, 16.938	-	27.08	+	5.219	))
=	43.299

	Invested Capital		(Q: Mar. 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	))
=	51.581	-	6.69	-	( 2.662	-	max(0, 13.516	-	25.988	+	2.662	))
=	42.229

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

Tekmar Group (LSE:TGP) 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, Tekmar Group's WACC % is 17.76%. Tekmar Group's ROC % is -19.64% (calculated using TTM income statement data). Tekmar Group 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.

Tekmar Group ROC % Related Terms

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Tekmar Group (LSE:TGP) Business Description

Industry

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6UA:Germany

Address

Centurion Way, Innovation House, Darlington, GBR, DL3 0UP

Website

https://www.tekmargroup.com

Tekmar Group PLC is engaged in the designing, manufacturing, and supply of subsea cable, umbilical, and flexible protection systems. Its sector includes Offshore Wind, Oil & Gas, Interconnectors, Wave & Tidal, Marine Civils, and Telecoms. Geographically it has a presence in the UK and Ireland, China, the USA and Canada, the Middle East, and the Rest of the World, and the majority of the revenue comes from Europe.