Theravance Biopharma (STU:0TB) ROC % : -18.73% (As of Sep. 2024)

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What is Theravance Biopharma 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 %. Theravance Biopharma's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -18.73%.

As of today (2024-12-14), Theravance Biopharma's WACC % is 4.90%. Theravance Biopharma's ROC % is -18.88% (calculated using TTM income statement data). Theravance Biopharma earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Theravance Biopharma ROC % Historical Data

The historical data trend for Theravance Biopharma'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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Theravance Biopharma ROC % Chart

Theravance Biopharma Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-251.66

-233.93

-176.94

-38.51

-22.65

Theravance Biopharma 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															-15.79	-16.03	-19.65	-22.23	-18.73

Theravance Biopharma ROC % Calculation

Theravance Biopharma'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 )
=	-48.869 * ( 1 - -12.02% )	/	( (246.091	+	237.254)	/ 2 )
=	-54.7430538	/	241.6725
=	-22.65 %

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	))
=	573.386	-	20.732	-	( 309.145	-	max(0, 27.107	-	333.67	+	309.145	))
=	246.091

	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	))
=	350.293	-	19.114	-	( 93.925	-	max(0, 22.711	-	122.457	+	93.925	))
=	237.254

Theravance Biopharma'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 )
=	-33.428 * ( 1 - -26.32% )	/	( (229.672	+	221.201)	/ 2 )
=	-42.2262496	/	225.4365
=	-18.73 %

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	))
=	336.325	-	17.397	-	( 89.256	-	max(0, 21.317	-	110.836	+	89.256	))
=	229.672

	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	))
=	320.851	-	17.334	-	( 82.316	-	max(0, 21.115	-	104.948	+	82.316	))
=	221.201

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

Theravance Biopharma (STU:0TB) 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, Theravance Biopharma's WACC % is 4.90%. Theravance Biopharma's ROC % is -18.88% (calculated using TTM income statement data). Theravance Biopharma 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.

Theravance Biopharma ROC % Related Terms

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Theravance Biopharma Business Description

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TBPH:USA

Address

Ugland House, South Church Street, George Town, PO Box 309, Grand Cayman, CYM, KY1-1104

Website

https://www.theravance.com

Theravance Biopharma Inc is a diversified biopharmaceutical company focused on the discovery, development, and commercialization of organ-selective medicines. Its purpose is to pioneer a new generation of small-molecule drugs designed to better meet patient needs. Its research is focused on the areas of inflammation and immunology. The firm applies organ-selective expertise to target disease biologically, to discover and develop medicines that may expand the therapeutic index with the goal of maximizing efficacy and limiting systemic side effects. The company develops lung-selective medicines to treat respiratory disease, including FDA-approved YUPELRI (revefenacin) inhalation solution indicated for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD).

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