MGAM (Mobile Global Esports) ROC % : -828.33% (As of Jun. 2024)

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What is Mobile Global Esports 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 %. Mobile Global Esports's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -828.33%.

As of today (2024-12-14), Mobile Global Esports's WACC % is 5.77%. Mobile Global Esports's ROC % is -517.77% (calculated using TTM income statement data). Mobile Global Esports earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Mobile Global Esports ROC % Historical Data

The historical data trend for Mobile Global Esports'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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Mobile Global Esports ROC % Chart

Mobile Global Esports Annual Data

Trend

Dec21

Dec22

Dec23

ROC %

-155.97

-527.55

Mobile Global Esports Quarterly Data
	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24
ROC %	Get a 7-Day Free Trial								-216.87	-426.19	-550.39	-993.16	-828.33

Mobile Global Esports ROC % Calculation

Mobile Global Esports'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 )
=	-4.988 * ( 1 - 0% )	/	( (1.618	+	0.273)	/ 2 )
=	-4.988	/	0.9455
=	-527.55 %

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	))
=	9.257	-	0.099	-	( 7.54	-	max(0, 0.208	-	8.133	+	7.54	))
=	1.618

	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	))
=	3.421	-	0.152	-	( 3.175	-	max(0, 0.272	-	3.268	+	3.175	))
=	0.273

Mobile Global Esports'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: Mar. 2024 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-1.988 * ( 1 - 0% )	/	( (0.224	+	0.256)	/ 2 )
=	-1.988	/	0.24
=	-828.33 %

where

	Invested Capital		(Q: Mar. 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	))
=	3.036	-	0.392	-	( 2.77	-	max(0, 0.474	-	2.894	+	2.77	))
=	0.224

	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	))
=	2.278	-	0.09	-	( 2.033	-	max(0, 0.157	-	2.089	+	2.033	))
=	0.256

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

Mobile Global Esports (OTCPK:MGAM) 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, Mobile Global Esports's WACC % is 5.77%. Mobile Global Esports's ROC % is -517.77% (calculated using TTM income statement data). Mobile Global Esports 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.

Mobile Global Esports ROC % Related Terms

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Mobile Global Esports Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Interactive Media » Mobile Global Esports Inc (OTCPK:MGAM) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

500 Post Road East, Westport, CT, USA, 06880

Website

https://www.mogoesports.com

Mobile Global Esports Inc develops and commercializes international esports, beginning with university esports events in India. It is launching an esports (electronic sports) platform initially focused on esports competitions played on mobile devices by university teams and players representing universities located in India and elsewhere in South Asia. The Company has one reportable segment, which is the development of esports.

Executives

David Randall Pross	officer: CEO	73 BLUE SPRUCE CIRCLE, WESTON CT 06883
James Knopf	director	500 POST ROAD EAST, 2ND FLOOR, WESTPORT CT 06883
Marco Welch	director, officer: Chairman of the board	500 POST ROAD EAST, 2ND FLOOR, WESTPORT CT 06883
Jay P. Madan	director	8480 HONEYCUTT RD, SUITE 200, RALEIGH NC 27615
Sports Industry Of India, Inc.	10 percent owner	616 S. EL CAMINO REAL, STE. H, SAN CLEMENTE CA 92672
Alexander Alexandrov	director	500 POST ROAD EAST, 2ND FLOOR, WESTPORT CT 02883
Kiki V Benson	officer: CFO	500 POST ROAD EAST, 2ND FLOOR, WESTPORT CT 06880
Willy Verhaegen	director	500 POST ROAD EAST, 2ND FLOOR, WESTPORT CT 06883