SATO Technologies (TSXV:SATO) ROC % : 20.12% (As of Dec. 2023)

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What is SATO Technologies 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 %. SATO Technologies's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 20.12%.

As of today (2024-05-21), SATO Technologies's WACC % is 25.47%. SATO Technologies's ROC % is 4.64% (calculated using TTM income statement data). SATO Technologies earns returns that do not match up to its cost of capital. It will destroy value as it grows.

SATO Technologies ROC % Historical Data

The historical data trend for SATO Technologies'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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SATO Technologies ROC % Chart

SATO Technologies Annual Data

Trend

Apr14

Apr15

Apr16

Apr17

Apr18

Apr19

Apr20

Apr21

Dec22

Dec23

ROC %

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-45.61

-70.18

-24.34

4.51

SATO Technologies Quarterly Data
	Jan19	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial															-6.33	3.22	4.13	-11.32	20.12

SATO Technologies ROC % Calculation

SATO Technologies'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 )
=	0.855 * ( 1 - 0% )	/	( (16.486	+	21.466)	/ 2 )
=	0.855	/	18.976
=	4.51 %

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	))
=	15.514	-	1.892	-	( 0.359	-	max(0, 6.101	-	3.237	+	0.359	))
=	16.486

	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	))
=	21.684	-	1.11	-	( 0.583	-	max(0, 7.137	-	6.245	+	0.583	))
=	21.466

SATO Technologies's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	4.368 * ( 1 - 0% )	/	( (21.955	+	21.466)	/ 2 )
=	4.368	/	21.7105
=	20.12 %

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	))
=	21.307	-	1.507	-	( 0.634	-	max(0, 7.27	-	5.115	+	0.634	))
=	21.955

	Invested Capital		(Q: 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	))
=	21.684	-	1.11	-	( 0.583	-	max(0, 7.137	-	6.245	+	0.583	))
=	21.466

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

SATO Technologies (TSXV:SATO) 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, SATO Technologies's WACC % is 25.47%. SATO Technologies's ROC % is 4.64% (calculated using TTM income statement data). SATO Technologies 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.

SATO Technologies ROC % Related Terms

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SATO Technologies (TSXV:SATO) Business Description

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CCPUF:USA

Address

66 Wellington Street West, Suite 5300, Toronto, ON, CAN, M5K 1E6

Website

https://www.bysato.com

SATO Technologies Corp is engaged in the business of utilizing specialized equipment to solve complex computational problems to validate transactions on the Bitcoin blockchain and others. The Group receives digital assets in return for successful service and is primarily engaged in the cryptocurrency mining industry.