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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Rocket Lab USA's annualized return on capital (ROC %) for the quarter that ended in Dec. 2024 was -29.95%.
As of today (2025-03-04), Rocket Lab USA's WACC % is 21.51%. Rocket Lab USA's ROC % is -28.60% (calculated using TTM income statement data). Rocket Lab USA earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Rocket Lab USA'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.
Rocket Lab USA Annual Data | |||||||||||
Trend | Dec20 | Dec21 | Dec22 | Dec23 | Dec24 | ||||||
ROC % | -43.08 | -46.98 | -36.03 | -32.04 | -27.56 |
Rocket Lab USA Quarterly Data | ||||||||||||||||||
Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | Dec24 | |
ROC % | Get a 7-Day Free Trial |
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-29.01 | -26.81 | -26.27 | -32.34 | -29.95 |
Rocket Lab USA's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2024 is calculated as:
ROC % (A: Dec. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2023 ) | + | Invested Capital (A: Dec. 2024 )) | / count ) |
= | -189.801 * ( 1 - -0.4% ) | / | ( (645.203 | + | 737.88) | / 2 ) |
= | -190.560204 | / | 691.5415 | |||
= | -27.56 % |
where
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 | )) |
= | 941.211 | - | 51.235 | - | ( 244.773 | - | max(0, 223.373 | - | 476.722 | + | 244.773 | )) |
= | 645.203 |
Invested Capital | (A: Dec. 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 | )) |
= | 1184.342 | - | 93.366 | - | ( 418.99 | - | max(0, 339.525 | - | 692.621 | + | 418.99 | )) |
= | 737.88 |
Rocket Lab USA's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2024 is calculated as:
ROC % (Q: Dec. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Sep. 2024 ) | + | Invested Capital (Q: Dec. 2024 )) | / count ) |
= | -206.196 * ( 1 - -1.31% ) | / | ( (656.897 | + | 737.88) | / 2 ) |
= | -208.8971676 | / | 697.3885 | |||
= | -29.95 % |
where
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 | )) |
= | 1153.029 | - | 69.832 | - | ( 442.389 | - | max(0, 269.199 | - | 695.499 | + | 442.389 | )) |
= | 656.897 |
Invested Capital | (Q: Dec. 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 | )) |
= | 1184.342 | - | 93.366 | - | ( 418.99 | - | max(0, 339.525 | - | 692.621 | + | 418.99 | )) |
= | 737.88 |
Note: The Operating Income data used here is four times the quarterly (Dec. 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.
Rocket Lab USA (NAS:RKLB) 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, Rocket Lab USA's WACC % is 21.51%. Rocket Lab USA's ROC % is -28.60% (calculated using TTM income statement data). Rocket Lab USA 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.
Thank you for viewing the detailed overview of Rocket Lab USA's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Nina Armagno | director | C/O ROCKET LAB USA, INC., 3881 MCGOWEN ST, LONG BEACH CA 90808 |
Alexander R Slusky | director | 456 MONTGOMERY STREET, 19TH FLOOR, SAN FRANCISCO CA 94104 |
Merline Saintil | director | 10 SOUTH FIRST AVENUE, WALLA WALLA WA 99362 |
Arjun Kampani | officer: See Remarks | C/O AEROJET ROCKETDYNE HOLDINGS, INC., 2001 AEROJET ROAD, RANCHO CORDOVA CA 95742 |
Adam C. Spice | officer: Chief Financial Officer | 2051 PALOMAR AIRPORT ROAD, SUITE 100, CARLSBAD CA 92011 |
Jon A Olson | director | 2100 LOGIC DRIVE, SAN JOSE CA 95124 |
Matthew Ocko | director | 270 UNIVERSITY AVENUE, PALO ALTO CA 94301 |
Michael D Griffin | director | 21700 ATLANTIC BLVD, ORBITAL SCIENCES CORP, DULLES VA 20166 |
Peter Beck | director, 10 percent owner, officer: President, CEO and Chairman | C/O ROCKET LAB USA, INC., 3881, LONG BEACH CA 90808 |
Shaun O'donnell | officer: EVP - Global Operations | C/O ROCKET LAB USA, INC., 3881 MCGOWEN STREET, LONG BEACH CA 90808 |
Edward H. Frank | director | C/O FUSION-IO, INC., 2855 E. COTTONWOOD PARKWAY, SUITE 100, SALT LAKE CITY UT 84121 |
Sven Strohband | director | C/O BERKSHIRE GREY, INC., 140 SOUTH ROAD, BEDFORD MA 01730 |
Cowan David J/ca | director | 50 WOODSIDE PLAZA, SUITE 720, REDWOOD CITY CA 94061 |
Peek Street Equatorial Trustee Ltd | 10 percent owner | 123 CELTIC CRESCENT, ELLERSLIE, AUCKLAND Q2 1051 |
Equatorial Trust | 10 percent owner | 123 CELTIC CRESCENT, ELLERSLIE, AUCKLAND Q2 1051 |
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