RMCO (Royalty Management Holding) ROC % : -4.64% (As of Sep. 2024)

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What is Royalty Management Holding 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 %. Royalty Management Holding's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -4.64%.

As of today (2024-12-12), Royalty Management Holding's WACC % is 10.17%. Royalty Management Holding's ROC % is -2.86% (calculated using TTM income statement data). Royalty Management Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Royalty Management Holding ROC % Historical Data

The historical data trend for Royalty Management Holding'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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Royalty Management Holding ROC % Chart

Royalty Management Holding Annual Data

Trend

Dec21

Dec22

Dec23

ROC %

-4.09

-1.91

Royalty Management Holding Quarterly Data
	Dec21	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial					-7.38	-2.48	0.40	-4.06	-4.64

Royalty Management Holding ROC % Calculation

Royalty Management Holding'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 )
=	-0.266 * ( 1 - 0% )	/	( (13.45	+	14.404)	/ 2 )
=	-0.266	/	13.927
=	-1.91 %

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	))
=	13.971	-	0.489	-	( 0.433	-	max(0, 0.547	-	0.579	+	0.433	))
=	13.45

	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	))
=	15.04	-	1.296	-	( 0.195	-	max(0, 1.36	-	0.7	+	0.195	))
=	14.404

Royalty Management Holding'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 )
=	-0.652 * ( 1 - 0% )	/	( (13.318	+	14.795)	/ 2 )
=	-0.652	/	14.0565
=	-4.64 %

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	))
=	13.723	-	1.009	-	( 0.039	-	max(0, 1.528	-	0.924	+	0.039	))
=	13.318

	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	))
=	15.395	-	0.814	-	( 0.145	-	max(0, 1.117	-	0.903	+	0.145	))
=	14.795

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

Royalty Management Holding (NAS:RMCO) 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, Royalty Management Holding's WACC % is 10.17%. Royalty Management Holding's ROC % is -2.86% (calculated using TTM income statement data). Royalty Management Holding 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.

Royalty Management Holding ROC % Related Terms

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Royalty Management Holding Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Royalty Management Holding Corp (NAS:RMCO) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

12115 Visionary Way, Unit 174, Fishers, IN, USA, 46038

Website

https://www.royaltymgmtcorp.com

Royalty Management Holding Corp formed to invest or purchase assets that have current or near-term income to provide the company with accretive cash flow from which it can reinvest in new assets or expand cash flow from existing assets. These assets typically are natural resources assets (including real estate and mining permits), patents, intellectual property, and emerging technologies.

Executives

Thomas M. Sauve	director	8856 SOUTH STREET, FISHERS IN 46038
Aqr Arbitrage Llc	10 percent owner	ONE GREENWICH PLAZA, GREENWICH CT 06830
Aqr Capital Management Llc	10 percent owner	ONE GREENWICH PLAZA, GREENWICH CT 06830
Aqr Capital Management Holdings, Llc	10 percent owner	ONE GREENWICH PLAZA, GREENWICH CT 06830
Mark C. Jensen	director, officer: Chairman and CEO	8856 SOUTH STREET, FISHERS IN 46038
Kirk Patrick Taylor	director, officer: President and CFO	8856 SOUTH STREET, FISHERS IN 46038