Alk-Abello AS (LTS:0OIR) ROC % : 16.54% (As of Sep. 2024)

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What is Alk-Abello AS 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 %. Alk-Abello AS's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 16.54%.

As of today (2024-12-13), Alk-Abello AS's WACC % is 8.33%. Alk-Abello AS's ROC % is 14.72% (calculated using TTM income statement data). Alk-Abello AS generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Alk-Abello AS ROC % Historical Data

The historical data trend for Alk-Abello AS'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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Alk-Abello AS ROC % Chart

Alk-Abello AS Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-1.16

0.82

4.92

7.03

9.26

Alk-Abello AS Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															8.37	10.68	17.21	14.32	16.54

Alk-Abello AS ROC % Calculation

Alk-Abello AS'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 )
=	666 * ( 1 - 24.88% )	/	( (5232	+	5577)	/ 2 )
=	500.2992	/	5404.5
=	9.26 %

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	))
=	6308	-	855	-	( 221	-	max(0, 1399	-	2645	+	221	))
=	5232

	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	))
=	6726	-	675	-	( 474	-	max(0, 1314	-	2968	+	474	))
=	5577

Alk-Abello AS's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	1224 * ( 1 - 24.56% )	/	( (5569	+	5594)	/ 2 )
=	923.3856	/	5581.5
=	16.54 %

where

	Invested Capital		(Q: Jun. 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	))
=	7045	-	1056	-	( 420	-	max(0, 1154	-	3078	+	420	))
=	5569

	Invested Capital		(Q: Sep. 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	))
=	7149	-	999	-	( 556	-	max(0, 1089	-	3213	+	556	))
=	5594

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

Alk-Abello AS (LTS:0OIR) 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, Alk-Abello AS's WACC % is 8.33%. Alk-Abello AS's ROC % is 14.72% (calculated using TTM income statement data). Alk-Abello AS generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

Alk-Abello AS ROC % Related Terms

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Alk-Abello AS Business Description

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GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Alk-Abello AS (LTS:0OIR) » Definitions » ROC %

Comparable Companies

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AKBLF:USA ALKBc:UK ALK B:Denmark 4AJ0:Germany

Address

Boge Alle 6-8, Horsholm, DNK, DK-2970

Website

https://www.alk.net

Alk-Abello AS is a biotechnology company that focuses on pharmaceutical prevention, diagnosis, and treatment of allergies. The company is focused on respiratory diseases, including allergic rhinitis and allergic asthma. Moreover, the firm specializes in venom immunotherapy for patients suffering from bee and wasp allergies. The company's treatments induce a protective immune response that provides sustained symptom relief. Its primary focus is on allergy patients whose disease is not well controlled, despite the use of symptom-relieving medication. The company operates in Europe, North America and International Markets. It derives maximum revenue from Europe.

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