Ivanhoe Electric (TSX:IE) ROC % : -56.76% (As of Sep. 2024)

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What is Ivanhoe Electric 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 %. Ivanhoe Electric's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -56.76%.

As of today (2024-12-15), Ivanhoe Electric's WACC % is 9.65%. Ivanhoe Electric's ROC % is -65.88% (calculated using TTM income statement data). Ivanhoe Electric earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Ivanhoe Electric ROC % Historical Data

The historical data trend for Ivanhoe Electric'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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Ivanhoe Electric ROC % Chart

Ivanhoe Electric Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

-42.25

-64.58

-114.71

-89.76

Ivanhoe Electric Quarterly Data
	Dec19	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial												-64.84	-62.60	-79.29	-67.64	-56.76

Ivanhoe Electric ROC % Calculation

Ivanhoe Electric'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 )
=	-242.027 * ( 1 - 0.27% )	/	( (153.433	+	384.387)	/ 2 )
=	-241.3735271	/	268.91
=	-89.76 %

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	))
=	353.87	-	18.942	-	( 189.728	-	max(0, 23.681	-	205.176	+	189.728	))
=	153.433

	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	))
=	653.662	-	32.129	-	( 275.086	-	max(0, 53.292	-	290.438	+	275.086	))
=	384.387

Ivanhoe Electric'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 )
=	-226.648 * ( 1 - 0% )	/	( (394.78	+	403.824)	/ 2 )
=	-226.648	/	399.302
=	-56.76 %

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	))
=	570.502	-	29.344	-	( 154.882	-	max(0, 55.094	-	201.472	+	154.882	))
=	394.78

	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	))
=	508.555	-	19.654	-	( 92.212	-	max(0, 56.8	-	141.877	+	92.212	))
=	403.824

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

Ivanhoe Electric (TSX:IE) 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, Ivanhoe Electric's WACC % is 9.65%. Ivanhoe Electric's ROC % is -65.88% (calculated using TTM income statement data). Ivanhoe Electric 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.

Ivanhoe Electric ROC % Related Terms

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Ivanhoe Electric Business Description

Industry

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IE:USA

Address

450 E Rio Salado Parkway, Suite 130, Tempe, AZ, USA, 85281

Website

https://www.ivanhoeelectric.com

Ivanhoe Electric Inc is a United States-based minerals exploration and development company with a focus on developing mines from mineral deposits located in the United States. The company has three reportable segments; Critical metals segment is focused on mineral project exploration and development with a focus on identifying and developing mineral projects, and ultimately mines, associated with the metals necessary for electrification, The data processing segment provides data analytics, geophysical modeling, and artificial intelligence services for the mineral, oil & gas and water exploration industries, and The energy storage segment develops, manufactures and installs vanadium flow batteries for grid-scale energy storage. It derives a majority of its revenue from Canada.