Arterra Bioscience SpA (MIL:ARBS) ROC % : 7.29% (As of Jun. 2024)

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What is Arterra Bioscience SpA 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 %. Arterra Bioscience SpA's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 7.29%.

As of today (2024-12-13), Arterra Bioscience SpA's WACC % is 8.03%. Arterra Bioscience SpA's ROC % is 15.07% (calculated using TTM income statement data). Arterra Bioscience SpA 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.

Arterra Bioscience SpA ROC % Historical Data

The historical data trend for Arterra Bioscience SpA'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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Arterra Bioscience SpA ROC % Chart

Arterra Bioscience SpA Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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23.42

23.80

18.66

22.02

13.35

Arterra Bioscience SpA Semi-Annual Data
	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial									23.82	21.02	4.92	23.46	7.29

Arterra Bioscience SpA ROC % Calculation

Arterra Bioscience SpA'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 )
=	1.145 * ( 1 - 17.36% )	/	( (5.875	+	8.301)	/ 2 )
=	0.946228	/	7.088
=	13.35 %

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	))
=	12.569	-	0.703	-	( 5.991	-	max(0, 1.155	-	9.504	+	5.991	))
=	5.875

	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	))
=	12.554	-	0.567	-	( 3.686	-	max(0, 0.843	-	7.652	+	3.686	))
=	8.301

Arterra Bioscience SpA'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 )
=	0.744 * ( 1 - 18.2% )	/	( (8.301	+	8.401)	/ 2 )
=	0.608592	/	8.351
=	7.29 %

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	))
=	12.554	-	0.567	-	( 3.686	-	max(0, 0.843	-	7.652	+	3.686	))
=	8.301

	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	))
=	12.541	-	0.713	-	( 3.427	-	max(0, 0.876	-	7.451	+	3.427	))
=	8.401

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

Arterra Bioscience SpA (MIL:ARBS) 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, Arterra Bioscience SpA's WACC % is 8.03%. Arterra Bioscience SpA's ROC % is 15.07% (calculated using TTM income statement data). Arterra Bioscience SpA 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.

Arterra Bioscience SpA ROC % Related Terms

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Arterra Bioscience SpA Business Description

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GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Arterra Bioscience SpA (MIL:ARBS) » Definitions » ROC %

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Address

via Benedetto Brin, 69, Napoli, ITA, 80142

Website

https://www.arterrabio.it

Arterra Bioscience SpA is a biotechnology company focused on the research and development of ingredients and natural solutions. It engages in the development of technological platforms, employed in the screening of active compounds for different industrial applications; setting up of new extraction processes, aimed at improving the sustainability and yield of interesting compounds; and production of high-tech raw materials with application in different industrial fields.

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