Green Thumb Industries (STU:R9U2) ROC % : 1.62% (As of Sep. 2024)

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What is Green Thumb Industries 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 %. Green Thumb Industries's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 1.62%.

As of today (2024-12-12), Green Thumb Industries's WACC % is 9.54%. Green Thumb Industries's ROC % is 3.41% (calculated using TTM income statement data). Green Thumb Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Green Thumb Industries ROC % Historical Data

The historical data trend for Green Thumb Industries'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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Green Thumb Industries ROC % Chart

Green Thumb Industries Annual Data

Trend

Feb14

Feb15

Feb16

Feb17

Feb18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-6.15

1.67

5.39

1.31

2.01

Green Thumb Industries 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															2.13	1.12	6.37	3.78	1.62

Green Thumb Industries ROC % Calculation

Green Thumb Industries'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 )
=	169.308 * ( 1 - 76.02% )	/	( (2002.429	+	2033.6)	/ 2 )
=	40.6000584	/	2018.0145
=	2.01 %

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	))
=	2297.25	-	127.089	-	( 167.732	-	max(0, 138.363	-	331.675	+	167.732	))
=	2002.429

	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	))
=	2283.382	-	101.564	-	( 148.218	-	max(0, 115.588	-	314.313	+	148.218	))
=	2033.6

Green Thumb Industries'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 )
=	153.616 * ( 1 - 77.88% )	/	( (2208.113	+	1985.162)	/ 2 )
=	33.9798592	/	2096.6375
=	1.62 %

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	))
=	2360.175	-	121.198	-	( 182.216	-	max(0, 344.268	-	375.132	+	182.216	))
=	2208.113

	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	))
=	2265.9	-	124.287	-	( 156.451	-	max(0, 144.763	-	353.078	+	156.451	))
=	1985.162

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

Green Thumb Industries (STU:R9U2) 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, Green Thumb Industries's WACC % is 9.54%. Green Thumb Industries's ROC % is 3.41% (calculated using TTM income statement data). Green Thumb Industries 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.

Green Thumb Industries ROC % Related Terms

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Green Thumb Industries Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Green Thumb Industries Inc (STU:R9U2) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

GTBIF:USA R9U2:Germany GTII:Canada

Address

325 West Huron Street, Suite 700, Chicago, IL, USA, 60654

Website

https://www.gtigrows.com

Green Thumb Industries is headquartered in Chicago, Illinois, and produces and sells medicinal and recreational cannabis through wholesale and retail channels in the United States. It has a presence in 14 states and operates 97 cannabis stores under the brand Rise. GTI is focusing its expansion on limited license states with large populations, and it does not currently export into the global medical market due to US federal prohibition. It offers multiple products under a portfolio of cannabis consumer packaged goods brands, including &Shine, Beboe, Dogwalkers, Doctor Solomon's, Good Green, incredibles, and RYTHM.

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