X1 Entertainment Group (XCNQ:XONE) ROC % : -116.14% (As of Feb. 2024)

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What is X1 Entertainment Group 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 %. X1 Entertainment Group's annualized return on capital (ROC %) for the quarter that ended in Feb. 2024 was -116.14%.

As of today (2024-05-31), X1 Entertainment Group's WACC % is 9.64%. X1 Entertainment Group's ROC % is 57.13% (calculated using TTM income statement data). X1 Entertainment Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

X1 Entertainment Group ROC % Historical Data

The historical data trend for X1 Entertainment Group'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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X1 Entertainment Group ROC % Chart

X1 Entertainment Group Annual Data

Trend

Aug22

Aug23

ROC %

-152.99

-412.41

X1 Entertainment Group Quarterly Data
	May21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
ROC %	Get a 7-Day Free Trial						-1,193.14	-1,630.33	2,529.89	-175.84	-116.14

X1 Entertainment Group ROC % Calculation

X1 Entertainment Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Aug. 2023 is calculated as:

	ROC % (A: Aug. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Aug. 2022 )	+	Invested Capital (A: Aug. 2023 ))	/ count )
=	-2.194 * ( 1 - 0% )	/	( (0.921	+	0.143)	/ 2 )
=	-2.194	/	0.532
=	-412.41 %

where

	Invested Capital		(A: Aug. 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	))
=	3.023	-	0.478	-	( 1.624	-	max(0, 0.708	-	2.416	+	1.624	))
=	0.921

	Invested Capital		(A: Aug. 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	))
=	0.02	-	0.407	-	( 0.008	-	max(0, 0.55	-	0.02	+	0.008	))
=	0.143

X1 Entertainment Group's annualized Return on Capital (ROC %) for the quarter that ended in Feb. 2024 is calculated as:

	ROC % (Q: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Nov. 2023 )	+	Invested Capital (Q: Feb. 2024 ))	/ count )
=	-0.572 * ( 1 - 0% )	/	( (0.453	+	0.532)	/ 2 )
=	-0.572	/	0.4925
=	-116.14 %

where

	Invested Capital		(Q: Nov. 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	))
=	0.225	-	0.382	-	( 0.178	-	max(0, 0.835	-	0.225	+	0.178	))
=	0.453

	Invested Capital		(Q: Feb. 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	))
=	0.492	-	0.293	-	( 0.381	-	max(0, 0.759	-	0.426	+	0.381	))
=	0.532

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

X1 Entertainment Group (XCNQ:XONE) 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, X1 Entertainment Group's WACC % is 9.64%. X1 Entertainment Group's ROC % is 57.13% (calculated using TTM income statement data). X1 Entertainment Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

X1 Entertainment Group ROC % Related Terms

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X1 Entertainment Group (XCNQ:XONE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » X1 Entertainment Group Inc (XCNQ:XONE) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

QN9:Germany

Address

615-800 West Pender Street, Vancouver, BC, CAN, V6C 2V6

Website

https://www.x1ent.com

X1 Entertainment Group Inc is an esports portfolio company that owns and operates an esports franchise, RixGG. The business of the company is the competitive playing of video games by teams for cash prizes, and operations ancillary to such competition, such as merchandising and the hosting of tournaments. It engages in the acquisition and development of esports teams and digital content creation which is considered one business segment.