MAG Silver (TSX:MAG) ROC % : -2.96% (As of Sep. 2024)

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What is MAG Silver 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 %. MAG Silver's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -2.96%.

As of today (2024-12-14), MAG Silver's WACC % is 8.57%. MAG Silver's ROC % is -2.96% (calculated using TTM income statement data). MAG Silver earns returns that do not match up to its cost of capital. It will destroy value as it grows.

MAG Silver ROC % Historical Data

The historical data trend for MAG Silver'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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MAG Silver ROC % Chart

MAG Silver Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-7.46

-5.62

-5.71

-3.66

-3.07

MAG Silver Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															-3.76	-2.22	-3.60	-3.05	-2.96

MAG Silver ROC % Calculation

MAG Silver'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 )
=	-19.112 * ( 1 - 10.28% )	/	( (510.872	+	604.526)	/ 2 )
=	-17.1472864	/	557.699
=	-3.07 %

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	))
=	554.036	-	3.453	-	( 40.694	-	max(0, 3.618	-	43.329	+	40.694	))
=	510.872

	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	))
=	698.343	-	3.579	-	( 92.177	-	max(0, 6.428	-	96.666	+	92.177	))
=	604.526

MAG Silver'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 )
=	-19.868 * ( 1 - 5.15% )	/	( (634.315	+	637.744)	/ 2 )
=	-18.844798	/	636.0295
=	-2.96 %

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	))
=	770.226	-	3.713	-	( 133.4	-	max(0, 4.89	-	137.088	+	133.4	))
=	634.315

	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	))
=	795.968	-	4.489	-	( 153.735	-	max(0, 4.881	-	158.84	+	153.735	))
=	637.744

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

MAG Silver (TSX:MAG) 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, MAG Silver's WACC % is 8.57%. MAG Silver's ROC % is -2.96% (calculated using TTM income statement data). MAG Silver 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.

MAG Silver ROC % Related Terms

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MAG Silver Business Description

Industry

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Traded in Other Exchanges

MAG:USA 0V56:UK MQ8:Germany MQ8:Germany

Address

800 West Pender Street, Suite 770, Vancouver, BC, CAN, V6C 2V6

Website

https://www.magsilver.com

MAG Silver Corp is a Canadian mining company. It is focused on advancing high-grade, district-scale precious metals projects in the Americas. The Company's principal asset is in the Juanicipio Mine located in Zacatecas, Mexico, which achieved commercial production of around 4,000 tonnes per day. The company has also Interest in the Larder project. Also, MAG has an expanded exploration program targeting multiple prospective targets at both Juanicipio and the Deer Trail 100% earn-in project in Utah. The Juanicipio Mine recognizes revenue for silver, gold, lead, and zinc from concentrate sales.

Executives

Thomas Peregoodoff	Director
Michael John Curlook	Senior Officer
Peter Megaw	Senior Officer
George Nickolas Paspalas	Director, Senior Officer
Daniel Thomas Macinnis	Director
Larry Taddei	Senior Officer
Dale Canfield Peniuk	Director
William James Mallory	Senior Officer
Selma Lussenburg	Director
The K2 Principal Fund L.p.	10% Security Holder
Ingrid Jo-ann Hibbard	Director
Richard Peter Clark	Director
Noëlle Drapeau	Director, Senior Officer
Darren Hartley Bondar	Director, Senior Officer
Zula Kropivnitski	Director