Diamond Estates Wines & Spirits (TSXV:DWS) ROC % : 0.59% (As of Sep. 2024)

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What is Diamond Estates Wines & Spirits 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 %. Diamond Estates Wines & Spirits's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 0.59%.

As of today (2024-12-12), Diamond Estates Wines & Spirits's WACC % is 10.42%. Diamond Estates Wines & Spirits's ROC % is -5.76% (calculated using TTM income statement data). Diamond Estates Wines & Spirits earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Diamond Estates Wines & Spirits ROC % Historical Data

The historical data trend for Diamond Estates Wines & Spirits'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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Diamond Estates Wines & Spirits ROC % Chart

Diamond Estates Wines & Spirits Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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-7.11

-2.09

-6.16

-10.17

-8.65

Diamond Estates Wines & Spirits 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															-9.15	-16.70	0.99	-6.65	0.59

Diamond Estates Wines & Spirits ROC % Calculation

Diamond Estates Wines & Spirits's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	-4.833 * ( 1 - 0% )	/	( (63.243	+	48.479)	/ 2 )
=	-4.833	/	55.861
=	-8.65 %

where

	Invested Capital		(A: Mar. 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	))
=	61.969	-	6.709	-	( 0	-	max(0, 37.773	-	29.79	+	0	))
=	63.243

	Invested Capital		(A: Mar. 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	))
=	52.593	-	6.508	-	( 0	-	max(0, 31.095	-	28.701	+	0	))
=	48.479

Diamond Estates Wines & Spirits'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 )
=	0.268 * ( 1 - 0% )	/	( (48.261	+	42.674)	/ 2 )
=	0.268	/	45.4675
=	0.59 %

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	))
=	52.207	-	7.232	-	( 0	-	max(0, 32.692	-	29.406	+	0	))
=	48.261

	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	))
=	49.342	-	6.767	-	( 0	-	max(0, 27.156	-	27.057	+	0	))
=	42.674

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

Diamond Estates Wines & Spirits (TSXV:DWS) 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, Diamond Estates Wines & Spirits's WACC % is 10.42%. Diamond Estates Wines & Spirits's ROC % is -5.76% (calculated using TTM income statement data). Diamond Estates Wines & Spirits 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.

Diamond Estates Wines & Spirits ROC % Related Terms

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Diamond Estates Wines & Spirits Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Beverages - Alcoholic » Diamond Estates Wines & Spirits Inc (TSXV:DWS) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

DWWEF:USA 4WS0:Germany

Address

1067 Niagara Stone Road, Niagara-On-The-Lake, ON, CAN, L0S 1J0

Website

https://www.lakeviewwineco.com

Diamond Estates Wines & Spirits Inc is a Canada-based firm engaged in the production, marketing, and sale of wine and through its agency division, operating as Trajectory Beverage Partners, distribution and marketing activities for various beverage alcohol brands that it represents in Canada. Its operating segments are Distribution and sales of products represented in Canada under agency agreements with third parties, and sales of manufactured wines. It generates a majority of its revenue from the sale of wines. Some of the firm's products include rose wine, white wine, red wine and others.

Executives

Oakwest Corporation Limited	10% Security Holder
Andrew Douglas Green	Senior Officer
Austin Cecil Beutel	Director or Senior Officer of 10% Security Holder
J. Murray Souter	Senior Officer
David Michael Beutel	Director

Diamond Estates Wines & Spirits Headlines

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