Flow Beverage (TSX:FLOW) ROC % : -29.53% (As of Jul. 2024)

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What is Flow Beverage 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 %. Flow Beverage's annualized return on capital (ROC %) for the quarter that ended in Jul. 2024 was -29.53%.

As of today (2024-12-15), Flow Beverage's WACC % is 21.16%. Flow Beverage's ROC % is -84.95% (calculated using TTM income statement data). Flow Beverage earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Flow Beverage ROC % Historical Data

The historical data trend for Flow Beverage'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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Flow Beverage ROC % Chart

Flow Beverage Annual Data

Trend

Jun17

Jun18

Jun19

Jun20

Oct21

Oct22

Oct23

ROC %

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-61.24

-54.46

-83.55

Flow Beverage Quarterly Data
	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24	Apr24	Jul24
ROC %	Get a 7-Day Free Trial															-129.26	-144.53	-186.27	-47.73	-29.53

Flow Beverage ROC % Calculation

Flow Beverage's annualized Return on Capital (ROC %) for the fiscal year that ended in Oct. 2023 is calculated as:

	ROC % (A: Oct. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Oct. 2022 )	+	Invested Capital (A: Oct. 2023 ))	/ count )
=	-38.35 * ( 1 - 0% )	/	( (67.108	+	24.694)	/ 2 )
=	-38.35	/	45.901
=	-83.55 %

where

	Invested Capital		(A: Oct. 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	))
=	82.338	-	12.948	-	( 2.282	-	max(0, 32.261	-	59.995	+	2.282	))
=	67.108

	Invested Capital		(A: Oct. 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	))
=	54.936	-	23.747	-	( 6.495	-	max(0, 33.068	-	48.606	+	6.495	))
=	24.694

Flow Beverage's annualized Return on Capital (ROC %) for the quarter that ended in Jul. 2024 is calculated as:

	ROC % (Q: Jul. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Apr. 2024 )	+	Invested Capital (Q: Jul. 2024 ))	/ count )
=	-14.556 * ( 1 - 0% )	/	( (47.024	+	51.566)	/ 2 )
=	-14.556	/	49.295
=	-29.53 %

where

	Invested Capital		(Q: Apr. 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	))
=	57.475	-	21.411	-	( 1.696	-	max(0, 37.861	-	26.901	+	1.696	))
=	47.024

	Invested Capital		(Q: Jul. 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	))
=	60.326	-	25.452	-	( 1.865	-	max(0, 47.509	-	30.817	+	1.865	))
=	51.566

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

Flow Beverage (TSX:FLOW) 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, Flow Beverage's WACC % is 21.16%. Flow Beverage's ROC % is -84.95% (calculated using TTM income statement data). Flow Beverage 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.

Flow Beverage ROC % Related Terms

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Flow Beverage Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Beverages - Non-Alcoholic » Flow Beverage Corp (TSX:FLOW) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

FLWBF:USA

Address

155 Industrial Parkway South, Unit 7-10, Aurora, ON, CAN, L4G 3G6

Website

https://www.flowhydration.com

Flow Beverage Corp is a health and wellness-focused beverage company at the convergence of three important trends in the consumer-packaged goods industry including, functional ingredients, sustainable packaging and supply chain and premium quality. It markets its premium alkaline spring water in Canada and the United States in original unflavoured and a range of organic flavors in various sizes. The company generates majority of its revenue from sale of packaged water and also provides Co-packing services. Geographically, majority of its revenue is generated from its business in Canada.

Executives

Stephen A. Smith

Director