News Communications (News Communications) ROC % : -43.76% (As of Dec. 2004)

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What is News Communications 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 %. News Communications's annualized return on capital (ROC %) for the quarter that ended in Dec. 2004 was -43.76%.

As of today (2024-05-25), News Communications's WACC % is 0.00%. News Communications's ROC % is 0.00% (calculated using TTM income statement data). News Communications earns returns that do not match up to its cost of capital. It will destroy value as it grows.

News Communications ROC % Historical Data

The historical data trend for News Communications'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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News Communications ROC % Chart

News Communications Annual Data

Trend

Nov96

Nov97

Nov98

Nov99

Dec00

Dec01

Dec02

Dec03

Dec04

ROC %

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-23.76

-55.99

-27.19

-47.83

-43.76

News Communications Semi-Annual Data
	Nov96	Nov97	Nov98	Nov99	Dec00	Dec01	Dec02	Dec03	Dec04
ROC %	Get a 7-Day Free Trial				-23.76	-55.99	-27.19	-47.83	-43.76

News Communications ROC % Calculation

News Communications's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2004 is calculated as:

	ROC % (A: Dec. 2004 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2003 )	+	Invested Capital (A: Dec. 2004 ))	/ count )
=	-0.961 * ( 1 - -4.42% )	/	( (2.879	+	1.707)	/ 2 )
=	-1.0034762	/	2.293
=	-43.76 %

where

	Invested Capital		(A: Dec. 2003 )
=	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	))
=	4.464	-	2.099	-	( 1.167	-	max(0, 3.681	-	3.167	+	1.167	))
=	2.879

	Invested Capital		(A: Dec. 2004 )
=	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	))
=	2.824	-	2.596	-	( 0.421	-	max(0, 3.144	-	1.665	+	0.421	))
=	1.707

News Communications's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2004 is calculated as:

	ROC % (Q: Dec. 2004 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2003 )	+	Invested Capital (Q: Dec. 2004 ))	/ count )
=	-0.961 * ( 1 - -4.42% )	/	( (2.879	+	1.707)	/ 2 )
=	-1.0034762	/	2.293
=	-43.76 %

where

	Invested Capital		(Q: Dec. 2003 )
=	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	))
=	4.464	-	2.099	-	( 1.167	-	max(0, 3.681	-	3.167	+	1.167	))
=	2.879

	Invested Capital		(Q: Dec. 2004 )
=	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	))
=	2.824	-	2.596	-	( 0.421	-	max(0, 3.144	-	1.665	+	0.421	))
=	1.707

Note: The Operating Income data used here is one times the annual (Dec. 2004) data.

News Communications (OTCPK:NWCM) 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, News Communications's WACC % is 0.00%. News Communications's ROC % is 0.00% (calculated using TTM income statement data). News Communications 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.

News Communications ROC % Related Terms

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News Communications (News Communications) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » News Communications Inc (OTCPK:NWCM) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

Website

News Communications, Inc. is engaged in publishing & distribution of advertiser-supported newspapers & magazines. It publishes three newspapers, two magazines including Dans Hampton Style & Dans Hampton Sports; & a guide, Dans Hampton Style Insider Guide.

Executives

Ross Wilbur L Jr

director

328 EL VEDADO ROAD, PALM BEACH FL 33480

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