KWESST Micro Systems (TSXV:KWE) ROC % : -258.97% (As of Dec. 2024)

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What is KWESST Micro Systems 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 %. KWESST Micro Systems's annualized return on capital (ROC %) for the quarter that ended in Dec. 2024 was -258.97%.

As of today (2025-03-24), KWESST Micro Systems's WACC % is 9.20%. KWESST Micro Systems's ROC % is -185.58% (calculated using TTM income statement data). KWESST Micro Systems earns returns that do not match up to its cost of capital. It will destroy value as it grows.

KWESST Micro Systems ROC % Historical Data

The historical data trend for KWESST Micro Systems'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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KWESST Micro Systems ROC % Chart

KWESST Micro Systems Annual Data

Trend

Sep21

Sep22

Sep23

Sep24

ROC %

-187.62

-154.21

-137.36

-136.18

KWESST Micro Systems Quarterly Data
	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24	Dec24
ROC %	Get a 7-Day Free Trial															-120.90	-169.74	-153.33	-181.97	-258.97

KWESST Micro Systems ROC % Calculation

KWESST Micro Systems's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2024 is calculated as:

	ROC % (A: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2023 )	+	Invested Capital (A: Sep. 2024 ))	/ count )
=	-9.799 * ( 1 - 0% )	/	( (9.501	+	4.89)	/ 2 )
=	-9.799	/	7.1955
=	-136.18 %

where

	Invested Capital		(A: Sep. 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	))
=	11.759	-	1.8	-	( 5.407	-	max(0, 6.384	-	6.842	+	5.407	))
=	9.501

	Invested Capital		(A: 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	))
=	5.617	-	1.861	-	( 0.257	-	max(0, 2.976	-	1.842	+	0.257	))
=	4.89

KWESST Micro Systems's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2024 is calculated as:

	ROC % (Q: Dec. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2024 )	+	Invested Capital (Q: Dec. 2024 ))	/ count )
=	-11.664 * ( 1 - 0% )	/	( (4.89	+	4.118)	/ 2 )
=	-11.664	/	4.504
=	-258.97 %

where

	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	))
=	5.617	-	1.861	-	( 0.257	-	max(0, 2.976	-	1.842	+	0.257	))
=	4.89

	Invested Capital		(Q: Dec. 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	))
=	8.07	-	1.133	-	( 2.854	-	max(0, 1.79	-	4.609	+	2.854	))
=	4.118

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

KWESST Micro Systems (TSXV:KWE) 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, KWESST Micro Systems's WACC % is 9.20%. KWESST Micro Systems's ROC % is -185.58% (calculated using TTM income statement data). KWESST Micro Systems 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.

KWESST Micro Systems ROC % Related Terms

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KWESST Micro Systems Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Aerospace & Defense » KWESST Micro Systems Inc (TSXV:KWE) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

KWE:USA 62U:Germany

Address

155 Terence Matthews Crescent, Unit No. 1, Kanata, Ottawa, ON, CAN, K2M 2A8

Website

https://www.kwesst.com

KWESST Micro Systems Inc develops and commercializes next-generation tactical systems. The company offers breakthrough technology in lethal and non-lethal systems with broad application, including law enforcement and personal defence, modernized digitization of tactical forces for shared situational awareness and targeting, and counter-measures against threats such as drones, lasers and electronic detection.

Executives

David Luxton	Director, Senior Officer
Harry Clarke Webster	Senior Officer
Sean Joseph Homuth	Senior Officer
Sol Global Investments Corp.	10% Security Holder
Steven Archambault	Senior Officer