Think Research (Think Research) ROC % : -13.25% (As of Sep. 2023)

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What is Think Research 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 %. Think Research's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was -13.25%.

As of today (2024-05-02), Think Research's WACC % is 9.39%. Think Research's ROC % is -8.14% (calculated using TTM income statement data). Think Research earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Think Research ROC % Historical Data

The historical data trend for Think Research'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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Think Research ROC % Chart

Think Research Annual Data

Trend

Sep20

Dec21

Dec22

ROC %

-45.09

-26.88

-12.50

Think Research Quarterly Data
	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23
ROC %	Get a 7-Day Free Trial								-13.83	-6.54	-6.66	-6.02	-13.25

Think Research ROC % Calculation

Think Research's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	-14.606 * ( 1 - 7.75% )	/	( (105.929	+	109.619)	/ 2 )
=	-13.474035	/	107.774
=	-12.50 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	107.114	-	11.469	-	( 4.941	-	max(0, 30.492	-	20.208	+	4.941	))
=	105.929

	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	))
=	90.452	-	9.751	-	( 2.514	-	max(0, 44.126	-	15.208	+	2.514	))
=	109.619

Think Research's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-15.376 * ( 1 - 19.71% )	/	( (86.446	+	99.956)	/ 2 )
=	-12.3453904	/	93.201
=	-13.25 %

where

	Invested Capital		(Q: Jun. 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	))
=	89.284	-	12.032	-	( 1.986	-	max(0, 25.212	-	16.018	+	1.986	))
=	86.446

	Invested Capital		(Q: Sep. 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	))
=	84.735	-	14.656	-	( 2.768	-	max(0, 44.187	-	14.31	+	2.768	))
=	99.956

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) data.

Think Research (OTCPK:THKKF) 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, Think Research's WACC % is 9.39%. Think Research's ROC % is -8.14% (calculated using TTM income statement data). Think Research 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.

Think Research ROC % Related Terms

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Think Research (Think Research) Business Description

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Address

199 Bay Street, Suite 4000, Toronto, ON, CAN, M5L 1A9

Website

https://www.thinkresearch.com

Think Research Corp and its subsidiaries are a healthcare technology company digitalizing the delivery of knowledge to facilitate better healthcare outcomes. The company gathers, develops, and delivers a knowledge-based Software-as-a-Service solution globally to customers which typically includes enterprise clients, hospitals, health regions, healthcare professionals, and/or governments. Its cloud-based, EMR-agnostic digital tools have empowered clinicians around the world and positively impacted millions of patients across the continuum of care, including primary physician care, acute care hospitals and surgical suites as well as community and senior care.