New Found Gold (TSXV:NFG) ROC % : -152.47% (As of Sep. 2024)

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What is New Found Gold 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 %. New Found Gold's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -152.47%.

As of today (2024-12-11), New Found Gold's WACC % is 6.79%. New Found Gold's ROC % is -195.79% (calculated using TTM income statement data). New Found Gold earns returns that do not match up to its cost of capital. It will destroy value as it grows.

New Found Gold ROC % Historical Data

The historical data trend for New Found Gold'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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New Found Gold ROC % Chart

New Found Gold Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

-259.93

-1,315.51

-435.18

-297.55

-281.55

New Found Gold 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															-431.82	-301.12	-196.25	-161.42	-152.47

New Found Gold ROC % Calculation

New Found Gold'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 )
=	-104.052 * ( 1 - 0% )	/	( (37.911	+	36.004)	/ 2 )
=	-104.052	/	36.9575
=	-281.55 %

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	))
=	110.688	-	5.589	-	( 89.64	-	max(0, 27.145	-	94.333	+	89.64	))
=	37.911

	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	))
=	84.579	-	5.207	-	( 57.293	-	max(0, 19.008	-	62.376	+	57.293	))
=	36.004

New Found Gold'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 )
=	-59.664 * ( 1 - 0% )	/	( (29.846	+	48.419)	/ 2 )
=	-59.664	/	39.1325
=	-152.47 %

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	))
=	79.522	-	3.445	-	( 54.532	-	max(0, 11.361	-	57.592	+	54.532	))
=	29.846

	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	))
=	89.672	-	5.369	-	( 40.627	-	max(0, 10.692	-	46.576	+	40.627	))
=	48.419

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

New Found Gold (TSXV:NFG) 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, New Found Gold's WACC % is 6.79%. New Found Gold's ROC % is -195.79% (calculated using TTM income statement data). New Found Gold 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.

New Found Gold ROC % Related Terms

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New Found Gold Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » New Found Gold Corp (TSXV:NFG) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

NFGC:USA 5QG:Germany

Address

1600 - 595 Burrard Street, Vancouver, BC, CAN, V6C 2V6

Website

https://www.newfoundgold.ca

New Found Gold Corp is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company's exploration is focused on discovering and delineating gold resources. The Company has one material property: the Queensway Project located in Newfoundland, Canada (the Queensway Project).

Executives

2176423 Ontario Ltd.	10% Security Holder
Eric Sprott	10% Security Holder
Sprott Mining Inc.	10% Security Holder
Raymond Wesley Threlkeld	Director
Denis Roland Laviolette	Director, Senior Officer
Craig A. Roberts	Director, Senior Officer
Melissa Render	Senior Officer
Quinton Todd Hennigh	Director