NGLPB.PFD (NGL Energy Partners LP) ROC % : 7.09% (As of Sep. 2024)

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What is NGL Energy Partners LP 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 %. NGL Energy Partners LP's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 7.09%.

As of today (2024-12-13), NGL Energy Partners LP's WACC % is 8.79%. NGL Energy Partners LP's ROC % is 6.12% (calculated using TTM income statement data). NGL Energy Partners LP earns returns that do not match up to its cost of capital. It will destroy value as it grows.

NGL Energy Partners LP ROC % Historical Data

The historical data trend for NGL Energy Partners LP'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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NGL Energy Partners LP ROC % Chart

NGL Energy Partners LP Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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4.82

1.53

3.55

8.03

6.97

NGL Energy Partners LP 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															9.14	9.10	1.84	11.53	7.09

NGL Energy Partners LP ROC % Calculation

NGL Energy Partners LP's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	293.508 * ( 1 - -1.71% )	/	( (4431.206	+	4131.242)	/ 2 )
=	298.5269868	/	4281.224
=	6.97 %

where

	Invested Capital		(A: Mar. 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	))
=	5456.144	-	1019.507	-	( 5.431	-	max(0, 1110.137	-	1292.445	+	5.431	))
=	4431.206

	Invested Capital		(A: 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	))
=	5020.094	-	849.943	-	( 38.909	-	max(0, 977.347	-	1178.934	+	38.909	))
=	4131.242

NGL Energy Partners LP'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 )
=	316.952 * ( 1 - 7.58% )	/	( (4093.829	+	4168.265)	/ 2 )
=	292.9270384	/	4131.047
=	7.09 %

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	))
=	4839.579	-	740.481	-	( 5.269	-	max(0, 864.551	-	990.257	+	5.269	))
=	4093.829

	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	))
=	4890.179	-	717.419	-	( 4.495	-	max(0, 828.985	-	1003.46	+	4.495	))
=	4168.265

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

NGL Energy Partners LP (NYSE:NGLpB.PFD) 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, NGL Energy Partners LP's WACC % is 8.79%. NGL Energy Partners LP's ROC % is 6.12% (calculated using TTM income statement data). NGL Energy Partners LP 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.

NGL Energy Partners LP ROC % Related Terms

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NGL Energy Partners LP Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » NGL Energy Partners LP (NYSE:NGLpB.PFD) » Definitions » ROC %

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Traded in Other Exchanges

NGLpC.PFD:USA NGL:USA

Address

6120 South Yale Avenue, Suite 1300, Tulsa, OK, USA, 74136

Website

https://www.nglenergypartners.com

NGL Energy Partners LP is a USA-based firm that owns and operates a vertically integrated energy business. The company's operating segments include Crude Oil Logistics, Water Solutions, and Liquids Logistics. It operates crude oil Logistics, owns pipeline injection stations, and offers services for the treatment and disposal of wastewater generated from crude oil and natural gas production, and for the disposal of solids, such as tank bottoms and drilling fluids. The firm also supplies natural gas liquids to retailers, wholesalers, refiners, and petrochemical plants and sells propane and distillates.