Okta (MEX:OKTA) ROC % : -0.54% (As of Oct. 2024)

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What is Okta 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 %. Okta's annualized return on capital (ROC %) for the quarter that ended in Oct. 2024 was -0.54%.

As of today (2024-12-12), Okta's WACC % is 8.96%. Okta's ROC % is -2.41% (calculated using TTM income statement data). Okta earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Okta ROC % Historical Data

The historical data trend for Okta'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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Okta ROC % Chart

Okta Annual Data

Trend

Jan15

Jan16

Jan17

Jan18

Jan19

Jan20

Jan21

Jan22

Jan23

Jan24

ROC %

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-21.64

-14.86

-16.61

-10.27

-6.11

Okta Quarterly Data
	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24	Apr24	Jul24	Oct24
ROC %	Get a 7-Day Free Trial															-6.57	-2.84	-4.47	-2.54	-0.54

Okta ROC % Calculation

Okta's annualized Return on Capital (ROC %) for the fiscal year that ended in Jan. 2024 is calculated as:

	ROC % (A: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jan. 2023 )	+	Invested Capital (A: Jan. 2024 ))	/ count )
=	-7901.052 * ( 1 - -5.34% )	/	( (140214.282	+	132308.268)	/ 2 )
=	-8322.9681768	/	136261.275
=	-6.11 %

where

	Invested Capital		(A: Jan. 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	))
=	174952.986	-	1579.032	-	( 48498.84	-	max(0, 27539.07	-	60698.742	+	48498.84	))
=	140214.282

	Invested Capital		(A: Jan. 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	))
=	154396.862	-	1511.506	-	( 37821.992	-	max(0, 30607.988	-	51185.076	+	37821.992	))
=	132308.268

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

	ROC % (Q: Oct. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jul. 2024 )	+	Invested Capital (Q: Oct. 2024 ))	/ count )
=	-1282.008 * ( 1 - 36% )	/	( (140150.76	+	161813.65)	/ 2 )
=	-820.48512	/	150982.205
=	-0.54 %

where

	Invested Capital		(Q: Jul. 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	))
=	168623.533	-	2845.418	-	( 43852.905	-	max(0, 30871.85	-	56499.205	+	43852.905	))
=	140150.76

	Invested Capital		(Q: Oct. 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	))
=	180482.914	-	3265.118	-	( 45030.587	-	max(0, 44750.148	-	60154.294	+	45030.587	))
=	161813.65

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

Okta (MEX:OKTA) 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, Okta's WACC % is 8.96%. Okta's ROC % is -2.41% (calculated using TTM income statement data). Okta 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.

Okta ROC % Related Terms

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Okta Business Description

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Traded in Other Exchanges

OKTA:USA 0KB7:UK 0OK:Germany O1KT34:Brazil

Address

100 First Street, Suite 600, San Francisco, CA, USA, 94105

Website

https://www.okta.com

Okta is a cloud-native security company that focuses on identity and access management. The San Francisco-based firm went public in 2017 and focuses on two key client stakeholder groups: workforces and customers. Okta's workforce offerings enable a company's employees to securely access its cloud-based and on-premises resources. The firm's customer offerings allow its clients' customers to securely access the client's applications.