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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Acceleron Pharma's annualized return on capital (ROC %) for the quarter that ended in Sep. 2021 was -182.99%.
As of today (2024-05-05), Acceleron Pharma's WACC % is 7.47%. Acceleron Pharma's ROC % is -228.51% (calculated using TTM income statement data). Acceleron Pharma earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Acceleron Pharma'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.
Acceleron Pharma Annual Data | |||||||||||||||||||||
Trend | Dec11 | Dec12 | Dec13 | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | |||||||||||
ROC % | Get a 7-Day Free Trial | -89.86 | -100.71 | -193.55 | -309.34 | -248.22 |
Acceleron Pharma Quarterly Data | ||||||||||||||||||||
Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | |
ROC % | Get a 7-Day Free Trial | -316.31 | -441.98 | -242.64 | -166.03 | -182.99 |
Acceleron Pharma's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2020 is calculated as:
ROC % (A: Dec. 2020 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2019 ) | + | Invested Capital (A: Dec. 2020 )) | / count ) |
= | -167.306 * ( 1 - -0.01% ) | / | ( (71.105 | + | 63.715) | / 2 ) |
= | -167.3227306 | / | 67.41 | |||
= | -248.22 % |
where
Invested Capital | (A: Dec. 2019 ) | |||||||||||
= | 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 | )) |
= | 504.906 | - | 17.258 | - | ( 431.369 | - | max(0, 33.373 | - | 449.916 | + | 431.369 | )) |
= | 71.105 |
Invested Capital | (A: Dec. 2020 ) | |||||||||||
= | 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 | )) |
= | 932.337 | - | 35.516 | - | ( 849.903 | - | max(0, 60.163 | - | 893.269 | + | 849.903 | )) |
= | 63.715 |
Acceleron Pharma's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2021 is calculated as:
ROC % (Q: Sep. 2021 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Jun. 2021 ) | + | Invested Capital (Q: Sep. 2021 )) | / count ) |
= | -282.52 * ( 1 - -0.02% ) | / | ( (160.776 | + | 148.071) | / 2 ) |
= | -282.576504 | / | 154.4235 | |||
= | -182.99 % |
where
Invested Capital | (Q: Jun. 2021 ) | |||||||||||
= | 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 | )) |
= | 836.052 | - | 51.926 | - | ( 623.35 | - | max(0, 59.478 | - | 717.773 | + | 623.35 | )) |
= | 160.776 |
Invested Capital | (Q: Sep. 2021 ) | |||||||||||
= | 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 | )) |
= | 787.848 | - | 49.208 | - | ( 590.569 | - | max(0, 57.371 | - | 696.608 | + | 590.569 | )) |
= | 148.071 |
Note: The Operating Income data used here is four times the quarterly (Sep. 2021) data.
* 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.
Acceleron Pharma (NAS:XLRN) 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, Acceleron Pharma's WACC % is 7.47%. Acceleron Pharma's ROC % is -228.51% (calculated using TTM income statement data). Acceleron Pharma 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.
Thank you for viewing the detailed overview of Acceleron Pharma's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Sujay Kango | officer: EVP, Chief Commercial Officer | 1028 CHAMBERS COURT, BRIDGEWATER NJ 08807 |
Kevin F Mclaughlin | officer: SVP, CFO and Treasurer | C/O ACCELERON PHARMA INC., 128 SIDNEY STREET, CAMBRIDGE MA 02139 |
Adam M Veness | officer: SVP, General Counsel and Sec. | C/O DIANTHUS THERAPEUTICS, INC., 7 TIMES SQUARE, 43RD FLOOR, NEW YORK NY 10036 |
Thomas A Mccourt | director | C/O IRONWOOD PHARMACEUTICALS, INC., 100 SUMMER STREET, SUITE 2300, BOSTON MA 02110 |
Karen L. Smith | director | C/O JAZZ PHARMACEUTICALS PLC, 5TH FL, WATERLOO EXCHANGE, WATERLOO RD, DUBLIN L2 4 L2 |
Joseph S Zakrzewski | director | 509 WATERVIEW PLACE, NEW HOPE PA 18938 |
Habib J Dable | director, officer: CEO and President | C/O ACCELERON PHARMA INC., 128 SIDNEY STREET, CAMBRIDGE MA 02139 |
Terrence C Kearney | director | IN CARE OF HOSPIRA, INC., 275 NORTH FIELD DRIVE, LAKE FOREST IL 60045 |
Laura Hamill | director | 333 LAKESIDE DRIVE, FOSTER CITY CA 94404 |
Bristol Myers Squibb Co | 10 percent owner | 430 E. 29TH STREET 14 FLOOR NEW YORK NY 10016 |
Celgene Corp /de/ | 10 percent owner | 86 MORRIS AVENUE, SUMMIT NJ 07901 |
Christopher Hite | director | C/O ACCELERON PHARMA INC., 128 SIDNEY STREET, CAMBRIDGE MA 02139 |
Francois Nader | director | 550 HILLS DRIVE, BEDMINSTER NJ 07921 |
Jean George | director | CRITICAL THERAPEUTICS INC, 60 WESTVIEW STREET, LEXINGTON MA 02421 |
Kemal Malik | director | C/O ACCELERON PHARMA INC. 128 SIDNEY STREET CAMBRIDGE MA 02139 |
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