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OM (Outset Medical) ROC % : -90.28% (As of Sep. 2024)


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What is Outset Medical 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 %. Outset Medical's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -90.28%.

As of today (2024-12-11), Outset Medical's WACC % is 13.77%. Outset Medical's ROC % is -127.49% (calculated using TTM income statement data). Outset Medical earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Outset Medical ROC % Historical Data

The historical data trend for Outset Medical'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.

Outset Medical ROC % Chart

Outset Medical Annual Data
Trend Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROC %
Get a 7-Day Free Trial -458.52 -222.81 -138.34 -155.10 -176.90

Outset Medical 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 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -185.29 -155.81 -151.40 -118.62 -90.28

Outset Medical ROC % Calculation

Outset Medical'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 )
=-169.77 * ( 1 - -0.3% )/( (99.272 + 93.24)/ 2 )
=-170.27931/96.256
=-176.90 %

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))
=400.115 - 13.341 - ( 287.502 - max(0, 51.949 - 373.645+287.502))
=99.272

Outset Medical'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 )
=-95.356 * ( 1 - -0.66% )/( (105.784 + 106.852)/ 2 )
=-95.9853496/106.318
=-90.28 %

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))
=314.534 - 13.902 - ( 194.848 - max(0, 43.433 - 295.137+194.848))
=105.784

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


Outset Medical  (NAS:OM) 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, Outset Medical's WACC % is 13.77%. Outset Medical's ROC % is -127.49% (calculated using TTM income statement data). Outset Medical 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.


Outset Medical ROC % Related Terms

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Outset Medical Business Description

Traded in Other Exchanges
N/A
Address
3052 Orchard Drive, San Jose, CA, USA, 95134
Outset Medical Inc is a medical technology company. It has developed a machine, Tablo, which reduces the cost and complexity of dialysis. Tablo provides Renal Replacement Therapy in Hospitals, Chronic Care in Dialysis Clinics and Home Dialysis.
Executives
Leslie Trigg director, officer: President & CEO C/O OUTSET MEDICAL, 1830 BERING ROAD, SAN JOSE CA 95112
Marc Nash officer: SVP, Operations and R&D 3052 ORCHARD DRIVE, SAN JOSE CA 95134
Nabeel Ahmed officer: Interim CFO 3052 ORCHARD DRIVE, SAN JOSE CA 95134
John L. Brottem officer: General Counsel 3052 ORCHARD DR., SAN JOSE CA 95134
D Keith Grossman director
Jean-olivier Racine officer: Chief Technology Officer 3052 ORCHARD DRIVE, SAN JOSE CA 95134
Steven S. Williamson officer: Chief Commercial Officer C/O HOLOGIC, INC., BEDFORD MA 01730
Stacey L. Porter officer: Chief People Officer 3052 ORCHARD DRIVE, SAN JOSE CA 95134
Martin Vazquez officer: Chief Operating Officer 3052 ORCHARD DR., SAN JOSE CA 95134
James F. Hinrichs director 3750 TORREY VIEW COURT, SAN DIEGO CA 92130
Dale E Jones director C/O HUGHES SUPPLY INC, 20 N ORANGE AVE, ORLANDO FL 32801
Rebecca Chambers officer: Chief Financial Officer 3052 ORCHARD DR., SAN JOSE CA 95134
Catherine M. Szyman director C/O EDWARDS LIFESCIENCES CORPORATION, ONE EDWARDS WAY, IRVINE CA 92614
Warburg Pincus Llc director, 10 percent owner 450 LEXINGTON AVENUE, NEW YORK NY 10017
Warburg Pincus X, L.p. director, 10 percent owner C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017

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