Sweet Earth Holdings (XCNQ:SE) ROC % : -3,440.00% (As of Dec. 2023)

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What is Sweet Earth Holdings 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 %. Sweet Earth Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -3,440.00%.

As of today (2024-05-05), Sweet Earth Holdings's WACC % is 16.86%. Sweet Earth Holdings's ROC % is -673.99% (calculated using TTM income statement data). Sweet Earth Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Sweet Earth Holdings ROC % Historical Data

The historical data trend for Sweet Earth Holdings'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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Sweet Earth Holdings ROC % Chart

Sweet Earth Holdings Annual Data

Trend

Jun20

Jun21

Jun22

Jun23

ROC %

-76.98

-104.75

-60.17

-76.27

Sweet Earth Holdings Quarterly Data
	Mar19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial												-91.77	-461.08	-316.28	-388.24	-3,440.00

Sweet Earth Holdings ROC % Calculation

Sweet Earth Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	-0.458 * ( 1 - 0% )	/	( (1.158	+	0.043)	/ 2 )
=	-0.458	/	0.6005
=	-76.27 %

where

	Invested Capital		(A: Jun. 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	))
=	1.283	-	1.011	-	( 0.135	-	max(0, 1.131	-	0.245	+	0.135	))
=	1.158

	Invested Capital		(A: Jun. 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	))
=	0.168	-	0.611	-	( 0.155	-	max(0, 0.641	-	0.155	+	0.155	))
=	0.043

Sweet Earth Holdings'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 )
=	-0.86 * ( 1 - 0% )	/	( (0.025	+	0.025)	/ 2 )
=	-0.86	/	0.025
=	-3,440.00 %

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	))
=	0.123	-	0.62	-	( 0.123	-	max(0, 0.645	-	0.123	+	0.123	))
=	0.025

	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	))
=	0.054	-	0.76	-	( 0.054	-	max(0, 0.785	-	0.054	+	0.054	))
=	0.025

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

Sweet Earth Holdings (XCNQ:SE) 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, Sweet Earth Holdings's WACC % is 16.86%. Sweet Earth Holdings's ROC % is -673.99% (calculated using TTM income statement data). Sweet Earth Holdings 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.

Sweet Earth Holdings ROC % Related Terms

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Sweet Earth Holdings (XCNQ:SE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Sweet Earth Holdings Corp (XCNQ:SE) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

SEHCF:USA 1KZ0:Germany

Address

903-700 West Pender Street, Vancouver, BC, CAN, V6C 1G8

Website

https://www.sweetearthskincare.com

Sweet Earth Holdings Corp is engaged in the business of the sale of hemp pre-roll and skin care products. 'It operates in a single segment, which includes cultivation and processing of hemp cannabidiol in the state of Oregon, USA, and in Cadiz, Spain'.