Gold Mountain Mining (TSX:GMTN) ROC % : -12.51% (As of Jul. 2024)

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What is Gold Mountain Mining 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 %. Gold Mountain Mining's annualized return on capital (ROC %) for the quarter that ended in Jul. 2024 was -12.51%.

As of today (2024-12-15), Gold Mountain Mining's WACC % is 15.41%. Gold Mountain Mining's ROC % is -21.79% (calculated using TTM income statement data). Gold Mountain Mining earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Gold Mountain Mining ROC % Historical Data

The historical data trend for Gold Mountain Mining'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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Gold Mountain Mining ROC % Chart

Gold Mountain Mining Annual Data

Trend

Jan19

Jan20

Jan21

Jan22

Jan23

Jan24

ROC %

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-9.99

-17.07

-51.20

-11.91

-11.65

Gold Mountain Mining Quarterly Data
	Jan19	Jan20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24	Apr24	Jul24
ROC %	Get a 7-Day Free Trial												-7.06	-26.33	-21.19	-26.87	-12.51

Gold Mountain Mining ROC % Calculation

Gold Mountain Mining's annualized Return on Capital (ROC %) for the fiscal year that ended in Jan. 2024 is calculated as:

	ROC % (A: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jan. 2023 )	+	Invested Capital (A: Jan. 2024 ))	/ count )
=	-5.493 * ( 1 - -0.05% )	/	( (42.614	+	51.744)	/ 2 )
=	-5.4957465	/	47.179
=	-11.65 %

where

	Invested Capital		(A: Jan. 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	))
=	46.016	-	2.873	-	( 3.203	-	max(0, 6.104	-	6.633	+	3.203	))
=	42.614

	Invested Capital		(A: Jan. 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	))
=	50.349	-	10.957	-	( 0.071	-	max(0, 12.847	-	0.495	+	0.071	))
=	51.744

Gold Mountain Mining'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 )
=	-6.576 * ( 1 - 0% )	/	( (54.32	+	50.787)	/ 2 )
=	-6.576	/	52.5535
=	-12.51 %

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	))
=	50.616	-	5.297	-	( 0.125	-	max(0, 9.799	-	0.798	+	0.125	))
=	54.32

	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	))
=	50.221	-	4.524	-	( 0.066	-	max(0, 5.5	-	0.41	+	0.066	))
=	50.787

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

Gold Mountain Mining (TSX:GMTN) 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, Gold Mountain Mining's WACC % is 15.41%. Gold Mountain Mining's ROC % is -21.79% (calculated using TTM income statement data). Gold Mountain Mining 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.

Gold Mountain Mining ROC % Related Terms

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Gold Mountain Mining Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Gold Mountain Mining Corp (TSX:GMTN) » Definitions » ROC %

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Traded in Other Exchanges

GMTNF:USA 5XFA:Germany

Address

1285 West Pender Street, Suite 1000, Vancouver, BC, CAN, V6E 4B1

Website

https://www.gold-mountain.ca

Gold Mountain Mining Corp is a gold and silver exploration and development company. It focuses on the expansion of the resource at the Elk Gold Project, a past-producing mine located 57 km from Merritt in South Central British Columbia. It operates in a single segment, being the production of crushed ore and mineral exploration and development of resources.

Executives

Nhwelmen Construction Gp Ltd.	10% Security Holder
Kevin Smith	Senior Officer
Alex Bayer	Senior Officer
Grant Carlson	Senior Officer
Howard Jones	Director
Gerald George Carlson	Director
Ronald Woo	Director, Senior Officer
Braydon David Hobbs	Senior Officer
Keith Charles Minty	Director
Blake Albert Steele	Director

Gold Mountain Mining Headlines

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