Nova Leap Health (TSXV:NLH) ROC % : 3.28% (As of Mar. 2024)

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What is Nova Leap Health 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 %. Nova Leap Health's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 3.28%.

As of today (2024-05-18), Nova Leap Health's WACC % is 14.02%. Nova Leap Health's ROC % is -0.65% (calculated using TTM income statement data). Nova Leap Health earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Nova Leap Health ROC % Historical Data

The historical data trend for Nova Leap Health'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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Nova Leap Health ROC % Chart

Nova Leap Health Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

ROC %

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-8.65

-0.89

114.55

13.37

-3.16

Nova Leap Health Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Mar24
ROC %	Get a 7-Day Free Trial															-4.39	-2.61	1.42	3.15	3.28

Nova Leap Health ROC % Calculation

Nova Leap Health's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	-1.443 * ( 1 - 30.73% )	/	( (32.541	+	30.783)	/ 2 )
=	-0.9995661	/	31.662
=	-3.16 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	34.264	-	2.063	-	( 2.218	-	max(0, 7.971	-	7.631	+	2.218	))
=	32.541

	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	))
=	32.535	-	1.766	-	( 1.729	-	max(0, 5.418	-	5.404	+	1.729	))
=	30.783

Nova Leap Health's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	1.012 * ( 1 - 15.57% )	/	( (27.242	+	24.894)	/ 2 )
=	0.8544316	/	26.068
=	3.28 %

where

	Invested Capital		(Q: 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	))
=	29.849	-	1.671	-	( 1.498	-	max(0, 3.127	-	4.063	+	1.498	))
=	27.242

	Invested Capital		(Q: 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	))
=	28.164	-	1.758	-	( 1.512	-	max(0, 2.302	-	4.096	+	1.512	))
=	24.894

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

Nova Leap Health (TSXV:NLH) 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, Nova Leap Health's WACC % is 14.02%. Nova Leap Health's ROC % is -0.65% (calculated using TTM income statement data). Nova Leap Health 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.

Nova Leap Health ROC % Related Terms

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Nova Leap Health (TSXV:NLH) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » Nova Leap Health Corp (TSXV:NLH) » Definitions » ROC %

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NVLPF:USA

Address

7071 Bayers Road, Suite 3006, Halifax, NS, CAN, B3L 2C2

Website

https://www.novaleaphealth.com

Nova Leap Health Corp operates in the healthcare industry. The company is a provider of personal home care and support services. The principal business activities of the company and its subsidiaries are to provide skilled and non-medical home care to clients. Its service offering includes meal preparation, housekeeping, transportation, personal care, and medication reminders. Its segments comprise Canadian and U.S operations. The company derives a majority of its revenue from the United States.

Executives

Christopher Donald Dobbin

Director, Senior Officer

Nova Leap Health (TSXV:NLH) Headlines

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