Dream Office Real Estate Investment Trust (TSX:D.UN) ROC % : 2.98% (As of Sep. 2024)

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What is Dream Office Real Estate Investment Trust 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 %. Dream Office Real Estate Investment Trust's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 2.98%.

As of today (2024-12-15), Dream Office Real Estate Investment Trust's WACC % is 5.86%. Dream Office Real Estate Investment Trust's ROC % is 2.36% (calculated using TTM income statement data). Dream Office Real Estate Investment Trust earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Dream Office Real Estate Investment Trust ROC % Historical Data

The historical data trend for Dream Office Real Estate Investment Trust'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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Dream Office Real Estate Investment Trust ROC % Chart

Dream Office Real Estate Investment Trust Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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3.64

3.36

3.11

2.95

3.04

Dream Office Real Estate Investment Trust Quarterly Data
	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Sep24
ROC %	Get a 7-Day Free Trial															2.87	3.06	3.34	3.12	2.98

Dream Office Real Estate Investment Trust ROC % Calculation

Dream Office Real Estate Investment Trust'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 )
=	89.781 * ( 1 - -0.06% )	/	( (3175.461	+	2731.647)	/ 2 )
=	89.8348686	/	2953.554
=	3.04 %

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	))
=	3066.925	-	53.022	-	( 8.018	-	max(0, 321.647	-	160.089	+	8.018	))
=	3175.461

	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	))
=	2668.33	-	47.128	-	( 13.273	-	max(0, 134.066	-	23.621	+	13.273	))
=	2731.647

Dream Office Real Estate Investment Trust'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: Mar. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	92.108 * ( 1 - -0.3% )	/	( (2995.923	+	3197.622)	/ 2 )
=	92.384324	/	3096.7725
=	2.98 %

where

	Invested Capital		(Q: Mar. 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	))
=	2666.935	-	49.208	-	( 14.392	-	max(0, 403.338	-	25.142	+	14.392	))
=	2995.923

	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	))
=	2623.842	-	53.602	-	( 33.857	-	max(0, 693.515	-	66.133	+	33.857	))
=	3197.622

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

Dream Office Real Estate Investment Trust (TSX:D.UN) 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, Dream Office Real Estate Investment Trust's WACC % is 5.86%. Dream Office Real Estate Investment Trust's ROC % is 2.36% (calculated using TTM income statement data). Dream Office Real Estate Investment Trust 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.

Dream Office Real Estate Investment Trust ROC % Related Terms

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Dream Office Real Estate Investment Trust Business Description

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Address

30 Adelaide Street East, Suite 301, State Street Financial Centre, Toronto, ON, CAN, M5C 3H1

Website

https://www.dream.ca

Dream Office Real Estate Investment Trust is a real estate investment trust that acquires, manages, and leases primarily central business district and suburban office properties in urban areas throughout Canada. The majority of the company's real estate portfolio, in terms of revenue generation, is located in the Canadian province of Ontario. The province of Alberta also brings in a sizable percentage of revenue. The company generates nearly all of its revenue in the form of rental income from mid-to long-term lease agreements with tenants. The company's office buildings located in central business districts are responsible for the vast majority of its revenue generation. Most of Dream Office's customers are in the finance, insurance, science, and government industries.

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