Workhorse Group (LTS:0A3U) ROC % : -143.30% (As of Dec. 2023)

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What is Workhorse 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 %. Workhorse Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -143.30%.

As of today (2024-05-03), Workhorse Group's WACC % is 29.31%. Workhorse Group's ROC % is -116.60% (calculated using TTM income statement data). Workhorse Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Workhorse Group ROC % Historical Data

The historical data trend for Workhorse 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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Workhorse Group ROC % Chart

Workhorse Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-61.85

-9.82

-58.93

-313.48

-127.65

Workhorse Group Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial															-213.59	-131.55	-97.09	-87.56	-143.30

Workhorse Group ROC % Calculation

Workhorse Group'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 )
=	-105.298 * ( 1 - 0.09% )	/	( (61.459	+	103.373)	/ 2 )
=	-105.2032318	/	82.416
=	-127.65 %

where

	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	))
=	182.742	-	45.235	-	( 99.276	-	max(0, 63.31	-	139.358	+	99.276	))
=	61.459

	Invested Capital		(A: Dec. 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	))
=	141.675	-	12.456	-	( 25.846	-	max(0, 53.282	-	93.825	+	25.846	))
=	103.373

Workhorse Group's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-140.676 * ( 1 - 0.24% )	/	( (92.492	+	103.373)	/ 2 )
=	-140.3383776	/	97.9325
=	-143.30 %

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	))
=	146.299	-	14.942	-	( 38.865	-	max(0, 25.871	-	97.779	+	38.865	))
=	92.492

	Invested Capital		(Q: Dec. 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	))
=	141.675	-	12.456	-	( 25.846	-	max(0, 53.282	-	93.825	+	25.846	))
=	103.373

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Workhorse Group (LTS:0A3U) 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, Workhorse Group's WACC % is 29.31%. Workhorse Group's ROC % is -116.60% (calculated using TTM income statement data). Workhorse 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.

Workhorse Group ROC % Related Terms

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Workhorse Group (LTS:0A3U) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Workhorse Group Inc (LTS:0A3U) » Definitions » ROC %

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Address

3600 Park 42 Drive, Suite 160E, Sharonville, OH, USA, 45241

Website

https://www.workhorse.com

Workhorse Group Inc is a technology company. It designs, develops, manufactures, and sells high-performance, medium-duty trucks with powertrain components under the Workhorse chassis brand. The company's products include trucks comprising powertrain and chassis. Its powertrain products include E-GEN and E-100. E-GEN is an electric drive, transmission-free system, which has a gasoline/propane or compressed natural gas (CNG) engine that functions as an auxiliary generator. E-100, an all-electric, medium-duty truck, is an electric power train. The company generates key revenue from the Automotive Revenue which consists of sales of any of its E-GEN or E-100 platforms.

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