PRT (PermRock Royalty Trust) ROC % : 7.28% (As of Sep. 2024)

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What is PermRock Royalty Trust 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 %. PermRock Royalty Trust's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 7.28%.

As of today (2024-12-13), PermRock Royalty Trust's WACC % is 8.40%. PermRock Royalty Trust's ROC % is 6.87% (calculated using TTM income statement data). PermRock Royalty Trust earns returns that do not match up to its cost of capital. It will destroy value as it grows.

PermRock Royalty Trust ROC % Historical Data

The historical data trend for PermRock Royalty Trust'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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PermRock Royalty Trust ROC % Chart

PermRock Royalty Trust Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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9.75

2.16

8.58

15.02

8.03

PermRock Royalty Trust 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															7.48	7.05	5.95	7.24	7.28

PermRock Royalty Trust ROC % Calculation

PermRock Royalty Trust'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 )
=	6.262 * ( 1 - 0% )	/	( (80.041	+	75.876)	/ 2 )
=	6.262	/	77.9585
=	8.03 %

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	))
=	82.023	-	0.982	-	( 1.982	-	max(0, 0.982	-	1.982	+	1.982	))
=	80.041

	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	))
=	77.245	-	0.369	-	( 1.369	-	max(0, 0.369	-	1.369	+	1.369	))
=	75.876

PermRock Royalty Trust'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 )
=	5.364 * ( 1 - 0% )	/	( (74.117	+	73.174)	/ 2 )
=	5.364	/	73.6455
=	7.28 %

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	))
=	75.604	-	0.487	-	( 1.487	-	max(0, 0.487	-	1.487	+	1.487	))
=	74.117

	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	))
=	74.539	-	0.365	-	( 1.365	-	max(0, 0.365	-	1.365	+	1.365	))
=	73.174

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

PermRock Royalty Trust (NYSE:PRT) 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, PermRock Royalty Trust's WACC % is 8.40%. PermRock Royalty Trust's ROC % is 6.87% (calculated using TTM income statement data). PermRock Royalty Trust 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.

PermRock Royalty Trust ROC % Related Terms

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PermRock Royalty Trust Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » PermRock Royalty Trust (NYSE:PRT) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

3838 Oak Lawn Avenue, Suite 1720, Argent Trust Company, Trustee, Dallas, TX, USA, 75219

Website

https://www.permrock.com

PermRock Royalty Trust operates as a statutory trust. Its purpose is to own the Net Profits Interest, to distribute to the Trust unitholders cash that it receives in respect of the Net Profits Interest, and to perform certain administrative functions. The Net Profits Interest entitles the trust to receive 80% of the net profits from the sale of oil and natural gas production from the underlying properties of its trustor.

Executives

Boaz Energy Ii, Llc	10 percent owner	3300 N. A STREET BLDG. 7 #150, MIDLAND TX 79705
Karan E Eves	10 percent owner	3300 N. A. STREET, BUILDING 7, MIDLAND TX 79705
Marshall J Eves	10 percent owner	3300 N. A. STREET, BUILDING 7, MIDLAND TX 79705
Ngp X Us Holdings Lp	10 percent owner	5221 N. O'CONNOR BOULEVARD, SUITE 1100, IRVING TX 75039
Ngp Boaz Energy Ii Co-invest Llc	10 percent owner	5221 N. O'CONNOR BOULEVARD, SUITE 1100, IRVING TX 75039