Southern Empire Resources (TSXV:SMP) ROC % : -5.13% (As of Jul. 2024)

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What is Southern Empire Resources 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 %. Southern Empire Resources's annualized return on capital (ROC %) for the quarter that ended in Jul. 2024 was -5.13%.

As of today (2024-12-15), Southern Empire Resources's WACC % is 6.67%. Southern Empire Resources's ROC % is -7.29% (calculated using TTM income statement data). Southern Empire Resources earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Southern Empire Resources ROC % Historical Data

The historical data trend for Southern Empire Resources'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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Southern Empire Resources ROC % Chart

Southern Empire Resources Annual Data

Trend

Oct17

Oct18

Oct19

Oct20

Oct21

Oct22

Oct23

ROC %

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-57.21

-48.03

-13.55

-8.35

-7.72

Southern Empire Resources Quarterly Data
	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24	Apr24	Jul24
ROC %	Get a 7-Day Free Trial															-6.05	-12.00	-6.04	-6.09	-5.13

Southern Empire Resources ROC % Calculation

Southern Empire Resources's annualized Return on Capital (ROC %) for the fiscal year that ended in Oct. 2023 is calculated as:

	ROC % (A: Oct. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Oct. 2022 )	+	Invested Capital (A: Oct. 2023 ))	/ count )
=	-0.944 * ( 1 - 0% )	/	( (12.548	+	11.896)	/ 2 )
=	-0.944	/	12.222
=	-7.72 %

where

	Invested Capital		(A: Oct. 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	))
=	15.618	-	0.521	-	( 2.977	-	max(0, 0.521	-	3.07	+	2.977	))
=	12.548

	Invested Capital		(A: Oct. 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	))
=	12.268	-	0.85	-	( 0.244	-	max(0, 0.85	-	0.372	+	0.244	))
=	11.896

Southern Empire Resources's annualized Return on Capital (ROC %) for the quarter that ended in Jul. 2024 is calculated as:

	ROC % (Q: Jul. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Apr. 2024 )	+	Invested Capital (Q: Jul. 2024 ))	/ count )
=	-0.628 * ( 1 - 0% )	/	( (12.207	+	12.288)	/ 2 )
=	-0.628	/	12.2475
=	-5.13 %

where

	Invested Capital		(Q: Apr. 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	))
=	12.258	-	1.195	-	( 0.017	-	max(0, 1.195	-	0.051	+	0.017	))
=	12.207

	Invested Capital		(Q: Jul. 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	))
=	12.369	-	1.434	-	( 0.026	-	max(0, 1.434	-	0.081	+	0.026	))
=	12.288

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

Southern Empire Resources (TSXV:SMP) 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, Southern Empire Resources's WACC % is 6.67%. Southern Empire Resources's ROC % is -7.29% (calculated using TTM income statement data). Southern Empire Resources 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.

Southern Empire Resources ROC % Related Terms

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Southern Empire Resources Business Description

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5RE:Germany

Address

789 West Pender Street, Suite 420, Vancouver, BC, CAN, V6C 1H2

Website

https://www.smp.gold

Southern Empire Resources Corp is a Canadian mining exploration company focused on expanding and developing known high-grade oxide gold deposits at its two properties in the southwestern USA namely Oro Cruz and Eastgate. It also holds an interest in the Pedro Gold Project.

Executives