Ovation Science (XCNQ:OVAT) ROC % : -186.30% (As of Mar. 2024)

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What is Ovation Science 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 %. Ovation Science's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -186.30%.

As of today (2024-06-22), Ovation Science's WACC % is 13.17%. Ovation Science's ROC % is -376.52% (calculated using TTM income statement data). Ovation Science earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Ovation Science ROC % Historical Data

The historical data trend for Ovation Science'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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Ovation Science ROC % Chart

Ovation Science Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-94.19

-88.85

-101.78

-1,820.69

-518.66

Ovation Science Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															-2,062.50	-2,530.00	-599.07	-226.89	-186.30

Ovation Science ROC % Calculation

Ovation Science'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 )
=	-0.695 * ( 1 - 0% )	/	( (0.029	+	0.239)	/ 2 )
=	-0.695	/	0.134
=	-518.66 %

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	))
=	0.105	-	0.147	-	( 0.029	-	max(0, 0.17	-	0.099	+	0.029	))
=	0.029

	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	))
=	0.077	-	0.474	-	( 0.049	-	max(0, 0.711	-	0.075	+	0.049	))
=	0.239

Ovation Science'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: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-0.612 * ( 1 - 0% )	/	( (0.239	+	0.418)	/ 2 )
=	-0.612	/	0.3285
=	-186.30 %

where

	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	))
=	0.077	-	0.474	-	( 0.049	-	max(0, 0.711	-	0.075	+	0.049	))
=	0.239

	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	))
=	0.078	-	0.431	-	( 0.031	-	max(0, 0.847	-	0.076	+	0.031	))
=	0.418

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

Ovation Science (XCNQ:OVAT) 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, Ovation Science's WACC % is 13.17%. Ovation Science's ROC % is -376.52% (calculated using TTM income statement data). Ovation Science 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.

Ovation Science ROC % Related Terms

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Ovation Science (XCNQ:OVAT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Ovation Science Inc (XCNQ:OVAT) » Definitions » ROC %

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OVATF:USA 0VH:Germany

Address

625 Howe Street, Suite 1140, Vancouver, BC, CAN, V6C 2T6

Website

https://www.ovationscience.com

Ovation Science Inc is a Canada-based company mainly engaged in the business of sub-licensing rights to use Invisicare, a patented drug delivery technology used in topical and transdermal skin products containing hemp seed oil and cannabis products. The company also holds the right to manufacture, distribute, sell, market, sub-license and promote products formulated with Invisicare and containing cannabis products including cannabinoids, hemp seed oil and any synthetic derivatives of cannabis. It also develops formulas for skin product lines including topical and transdermal creams and lotions containing hemp seed oil and cannabis.

Executives

David K. Ryan

Director

Ovation Science (XCNQ:OVAT) Headlines

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