Virnect Co (XKRX:438700) ROC % : -44.71% (As of Sep. 2024)

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What is Virnect Co 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 %. Virnect Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -44.71%.

As of today (2024-12-13), Virnect Co's WACC % is 8.25%. Virnect Co's ROC % is -49.45% (calculated using TTM income statement data). Virnect Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Virnect Co ROC % Historical Data

The historical data trend for Virnect Co'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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Virnect Co ROC % Chart

Virnect Co Annual Data

Trend

Dec21

Dec22

Dec23

ROC %

-7.63

-30.04

-42.36

Virnect Co Quarterly Data
	Mar22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial					-62.95	-32.21	-70.46	-56.44	-44.71

Virnect Co ROC % Calculation

Virnect Co'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 )
=	-11308.436 * ( 1 - -0.5% )	/	( (32722.794	+	20933.59)	/ 2 )
=	-11364.97818	/	26828.192
=	-42.36 %

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	))
=	39225.004	-	1862.334	-	( 9518.22	-	max(0, 6943.073	-	11582.949	+	9518.22	))
=	32722.794

	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	))
=	56827.235	-	1378.086	-	( 36315.504	-	max(0, 4425.3	-	38940.859	+	36315.504	))
=	20933.59

Virnect Co's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	-12046.048 * ( 1 - -1.58% )	/	( (25179.804	+	29551.657)	/ 2 )
=	-12236.3755584	/	27365.7305
=	-44.71 %

where

	Invested Capital		(Q: Jun. 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	))
=	49683.716	-	606.148	-	( 25704.269	-	max(0, 3786.463	-	27684.227	+	25704.269	))
=	25179.804

	Invested Capital		(Q: Sep. 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	))
=	46847.477	-	898.218	-	( 22603.042	-	max(0, 8651.638	-	25049.24	+	22603.042	))
=	29551.657

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

Virnect Co (XKRX:438700) 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, Virnect Co's WACC % is 8.25%. Virnect Co's ROC % is -49.45% (calculated using TTM income statement data). Virnect Co 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.

Virnect Co ROC % Related Terms

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Virnect Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Virnect Co Ltd (XKRX:438700) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

10-15, Hangang-daero 7-gil, Vernect Experience Center, Yongsan-gu, Seoul, KOR

Website

https://www.virnect.com

Virnect Co Ltd is a technology company that leads XR technology trends and specializes in developing XR solutions that can solve problems in the industrial field. It provides products and services for 3D real-time visualization, virtual and augmented reality, remote monitoring and operation, and telecommunication access. Its product offering comprises VIRNECT Remote, VIRNECT Make, VIRNECT View, VIRNECT Twin, VIRNECT Track, and XR Devices.

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