Relief Therapeutics Holding (LTS:0QKQ) ROC % : -15.79% (As of Jun. 2024)

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What is Relief Therapeutics Holding 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 %. Relief Therapeutics Holding's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -15.79%.

As of today (2024-12-12), Relief Therapeutics Holding's WACC % is -2.56%. Relief Therapeutics Holding's ROC % is -14.50% (calculated using TTM income statement data). Relief Therapeutics Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Relief Therapeutics Holding ROC % Historical Data

The historical data trend for Relief Therapeutics Holding'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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Relief Therapeutics Holding ROC % Chart

Relief Therapeutics Holding Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-1.66

-91.09

-27.75

-17.45

-15.07

Relief Therapeutics Holding Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															-18.95	-15.40	-14.44	-16.90	-15.79

Relief Therapeutics Holding ROC % Calculation

Relief Therapeutics Holding'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 )
=	-19.778 * ( 1 - 12.09% )	/	( (171.044	+	59.779)	/ 2 )
=	-17.3868398	/	115.4115
=	-15.07 %

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	))
=	188.798	-	5.887	-	( 19.237	-	max(0, 10.716	-	22.583	+	19.237	))
=	171.044

	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	))
=	76.39	-	5.216	-	( 14.556	-	max(0, 6.909	-	18.304	+	14.556	))
=	59.779

Relief Therapeutics Holding's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-8.102 * ( 1 - -14.01% )	/	( (59.779	+	57.238)	/ 2 )
=	-9.2370902	/	58.5085
=	-15.79 %

where

	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	))
=	76.39	-	5.216	-	( 14.556	-	max(0, 6.909	-	18.304	+	14.556	))
=	59.779

	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	))
=	70.921	-	3.735	-	( 10.728	-	max(0, 4.763	-	14.711	+	10.728	))
=	57.238

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

Relief Therapeutics Holding (LTS:0QKQ) 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, Relief Therapeutics Holding's WACC % is -2.56%. Relief Therapeutics Holding's ROC % is -14.50% (calculated using TTM income statement data). Relief Therapeutics Holding 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.

Relief Therapeutics Holding ROC % Related Terms

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Relief Therapeutics Holding Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Relief Therapeutics Holding SA (LTS:0QKQ) » Definitions » ROC %

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RLFTY:USA RLFTF:USA RLFz:UK RLF:Switzerland

Address

Avenue de Secheron 15, Geneva, CHE, 1202

Website

https://www.relieftherapeutics.com

Relief Therapeutics Holding SA is engaged in the research, development, and commercialization of biopharmaceutical products. It mainly develops drugs of natural human origin. It has a focus on commercial products and the development program pipeline is focused on three main areas: rare genetic, metabolic disorders, rare connective tissue disorders, and rare lung diseases. Its pipeline includes various drug candidates in their different stages of development such as RLF-TD011, and RLF-100, among others. It also has commercial legacy products like Cambia, Setofilm, Voltadol, and Voltfast among others. Geographically the company generates a majority of its revenue from Europe (excluding Switzerland) and the rest from North America, Switzerland, and the rest of the world.

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