Valiant Petroleum (LSE:VPP) ROC % : -9.82% (As of Jun. 2012)

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What is Valiant Petroleum 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 %. Valiant Petroleum's annualized return on capital (ROC %) for the quarter that ended in Jun. 2012 was -9.82%.

As of today (2024-06-24), Valiant Petroleum's WACC % is 0.00%. Valiant Petroleum's ROC % is 0.00% (calculated using TTM income statement data). Valiant Petroleum earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Valiant Petroleum ROC % Historical Data

The historical data trend for Valiant Petroleum'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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Valiant Petroleum ROC % Chart

Valiant Petroleum Annual Data

Trend

Sep06

Sep07

Dec08

Dec09

Dec10

Dec11

ROC %

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-10.65

-24.65

5.05

9.50

21.34

Valiant Petroleum Semi-Annual Data
	Mar08	Jun09	Dec09	Jun10	Dec10	Jun11	Dec11	Jun12
ROC %	Get a 7-Day Free Trial			7.30	11.11	14.83	33.23	-9.82

Valiant Petroleum ROC % Calculation

Valiant Petroleum's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2011 is calculated as:

	ROC % (A: Dec. 2011 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2010 )	+	Invested Capital (A: Dec. 2011 ))	/ count )
=	87.732 * ( 1 - 20.1% )	/	( (308.34	+	348.756)	/ 2 )
=	70.097868	/	328.548
=	21.34 %

where

	Invested Capital		(A: Dec. 2010 )
=	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	))
=	339.992	-	4.473	-	( 37.459	-	max(0, 58.794	-	85.973	+	37.459	))
=	308.34

	Invested Capital		(A: Dec. 2011 )
=	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	))
=	368.353	-	18.807	-	( 11.641	-	max(0, 53.753	-	54.543	+	11.641	))
=	348.756

Valiant Petroleum's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2012 is calculated as:

	ROC % (Q: Jun. 2012 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2011 )	+	Invested Capital (Q: Jun. 2012 ))	/ count )
=	-49.976 * ( 1 - 31.18% )	/	( (348.756	+	351.391)	/ 2 )
=	-34.3934832	/	350.0735
=	-9.82 %

where

	Invested Capital		(Q: Dec. 2011 )
=	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	))
=	368.353	-	18.807	-	( 11.641	-	max(0, 53.753	-	54.543	+	11.641	))
=	348.756

	Invested Capital		(Q: Jun. 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	))
=	444.17	-	86.998	-	( 25.982	-	max(0, 86.998	-	92.779	+	25.982	))
=	351.391

Note: The Operating Income data used here is two times the semi-annual (Jun. 2012) data.

Valiant Petroleum (LSE:VPP) 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, Valiant Petroleum's WACC % is 0.00%. Valiant Petroleum's ROC % is 0.00% (calculated using TTM income statement data). Valiant Petroleum 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.

Valiant Petroleum ROC % Related Terms

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Valiant Petroleum (LSE:VPP) Business Description

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