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New Providence Acquisition II (New Providence Acquisition II) ROC % : -1.60% (As of Mar. 2024)


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What is New Providence Acquisition II 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 %. New Providence Acquisition II's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -1.60%.

As of today (2024-06-17), New Providence Acquisition II's WACC % is 10.18%. New Providence Acquisition II's ROC % is -0.98% (calculated using TTM income statement data). New Providence Acquisition II earns returns that do not match up to its cost of capital. It will destroy value as it grows.

New Providence Acquisition II ROC % Historical Data

The historical data trend for New Providence Acquisition II'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.

* Premium members only.

New Providence Acquisition II ROC % Chart

New Providence Acquisition II Annual Data
Trend Dec21 Dec22 Dec23
ROC %
-0.18 -0.35 -0.62

New Providence Acquisition II Quarterly Data
Jan21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
ROC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -0.39 -0.84 -1.56 -0.92 -1.60

New Providence Acquisition II ROC % Calculation

New Providence Acquisition II'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 )
=-1.326 * ( 1 - 26.43% )/( (257.914 + 57.271)/ 2 )
=-0.9755382/157.5925
=-0.62 %

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))
=258.665 - 1.139 - ( 0.34 - max(0, 1.139 - 0.751+0.34))
=257.914

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))
=57.051 - 3.561 - ( 0.057 - max(0, 3.851 - 0.07+0.057))
=57.271

New Providence Acquisition II's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

ROC % (Q: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2023 ) + Invested Capital (Q: Mar. 2024 ))/ count )
=-1.596 * ( 1 - 42.2% )/( (57.271 + 58.002)/ 2 )
=-0.922488/57.6365
=-1.60 %

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))
=57.051 - 3.561 - ( 0.057 - max(0, 3.851 - 0.07+0.057))
=57.271

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))
=57.548 - 3.557 - ( 0.055 - max(0, 4.147 - 0.136+0.055))
=58.002

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

* 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.

New Providence Acquisition II  (NAS:NPABW) 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, New Providence Acquisition II's WACC % is 10.18%. New Providence Acquisition II's ROC % is -0.98% (calculated using TTM income statement data). New Providence Acquisition II 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.

New Providence Acquisition II ROC % Related Terms

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New Providence Acquisition II (New Providence Acquisition II) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Financial Services » Diversified Financial Services » New Providence Acquisition Corp II (NAS:NPABW) » Definitions » ROC %
Comparable Companies
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Traded in Other Exchanges
NPAB:USA
Address
10900 Research Boulevard, Suite 160C, PMB 1081, Austin, TX, USA, 78759
Website
https://www.npa-corp.com
New Providence Acquisition Corp II is a blank check company formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more businesses.