Savanna Energy Services (TSX:SVY) ROC % : -5.02% (As of Mar. 2017)

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What is Savanna Energy Services 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 %. Savanna Energy Services's annualized return on capital (ROC %) for the quarter that ended in Mar. 2017 was -5.02%.

As of today (2024-05-24), Savanna Energy Services's WACC % is 0.00%. Savanna Energy Services's ROC % is 0.00% (calculated using TTM income statement data). Savanna Energy Services earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Savanna Energy Services ROC % Historical Data

The historical data trend for Savanna Energy Services'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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Savanna Energy Services ROC % Chart

Savanna Energy Services Annual Data

Trend

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

ROC %

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4.32

3.48

-20.65

-17.22

-4.77

Savanna Energy Services Quarterly Data
	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16	Mar17
ROC %	Get a 7-Day Free Trial															-1.57	-6.12	-5.03	-7.18	-5.02

Savanna Energy Services ROC % Calculation

Savanna Energy Services's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2016 is calculated as:

	ROC % (A: Dec. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2015 )	+	Invested Capital (A: Dec. 2016 ))	/ count )
=	-46.334 * ( 1 - 19.67% )	/	( (823.098	+	736.981)	/ 2 )
=	-37.2201022	/	780.0395
=	-4.77 %

where

	Invested Capital		(A: Dec. 2015 )
=	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	))
=	879.146	-	50.281	-	( 5.767	-	max(0, 56.679	-	89.678	+	5.767	))
=	823.098

	Invested Capital		(A: Dec. 2016 )
=	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	))
=	813.876	-	57.932	-	( 18.963	-	max(0, 70.72	-	108.79	+	18.963	))
=	736.981

Savanna Energy Services's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2017 is calculated as:

	ROC % (Q: Mar. 2017 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2016 )	+	Invested Capital (Q: Mar. 2017 ))	/ count )
=	-57.244 * ( 1 - 27.42% )	/	( (736.981	+	918.653)	/ 2 )
=	-41.5476952	/	827.817
=	-5.02 %

where

	Invested Capital		(Q: Dec. 2016 )
=	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	))
=	813.876	-	57.932	-	( 18.963	-	max(0, 70.72	-	108.79	+	18.963	))
=	736.981

	Invested Capital		(Q: Mar. 2017 )
=	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	))
=	823.068	-	61.708	-	( 25.434	-	max(0, 282.283	-	124.99	+	25.434	))
=	918.653

Note: The Operating Income data used here is four times the quarterly (Mar. 2017) data.

Savanna Energy Services (TSX:SVY) 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, Savanna Energy Services's WACC % is 0.00%. Savanna Energy Services's ROC % is 0.00% (calculated using TTM income statement data). Savanna Energy Services 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.

Savanna Energy Services ROC % Related Terms

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Savanna Energy Services (TSX:SVY) Business Description

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http://www.savannaenergy.com

Savanna Energy Services Corp was incorporated under the Alberta Business Corporations Act on March 22, 2001. It is a drilling, well servicing and oilfield rentals company with operations in Canada, the United States and Australia. It provides a variety of services in the oil and natural gas industry. The corporate segment provides management and administrative services to all of the Company's subsidiaries and their respective operations. The services segment provides well servicing services and rental equipment to the oil and gas industry. The drilling segment provides contract drilling services to the oil and gas industry. The Company's overall business is conducted through two divisions: contract drilling and oilfield services. The Company's equipment fleet is among the newest and technically in the industry and its commitment to talent and technology has enabled the Company to build a presence within the oilfield services sector. It has also expanded its customer base to international markets, diversifying geographically into growing and emerging markets. The Company operates through a number of wholly-owned subsidiaries and several partnerships with Aboriginal communities that are partially owned by the Company.

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