GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Zeo Energy Corp (NAS:ZEO) » Definitions » ROC %

ZEO (Zeo Energy) ROC % : -21.76% (As of Jun. 2024)


View and export this data going back to 2024. Start your Free Trial

What is Zeo Energy 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 %. Zeo Energy's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -21.76%.

As of today (2024-12-12), Zeo Energy's WACC % is 9.92%. Zeo Energy's ROC % is 0.45% (calculated using TTM income statement data). Zeo Energy earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Zeo Energy ROC % Historical Data

The historical data trend for Zeo Energy'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.

* Premium members only.

Zeo Energy ROC % Chart

Zeo Energy Annual Data
Trend Dec21 Dec22 Dec23
ROC %
22.34 26.47 18.27

Zeo Energy Quarterly Data
Dec21 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24
ROC % Get a 7-Day Free Trial Premium Member Only - 45.11 1.48 -18.10 -21.76

Zeo Energy ROC % Calculation

Zeo Energy'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 )
=6.538 * ( 1 - 0% )/( (33.712 + 37.866)/ 2 )
=6.538/35.789
=18.27 %

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))
=35.201 - 0.671 - ( 2.268 - max(0, 2.524 - 3.342+2.268))
=33.712

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))
=47.987 - 7.66 - ( 8.022 - max(0, 13.628 - 16.089+8.022))
=37.866

Zeo Energy's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

ROC % (Q: Jun. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2024 ) + Invested Capital (Q: Jun. 2024 ))/ count )
=-8.784 * ( 1 - 4.52% )/( (38.206 + 38.896)/ 2 )
=-8.3869632/38.551
=-21.76 %

where

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))
=51.586 - 5.649 - ( 7.731 - max(0, 8.879 - 19.932+7.731))
=38.206

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))
=49.071 - 4.833 - ( 5.342 - max(0, 8.234 - 17.896+5.342))
=38.896

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

Zeo Energy  (NAS:ZEO) 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, Zeo Energy's WACC % is 9.92%. Zeo Energy's ROC % is 0.45% (calculated using TTM income statement data). Zeo Energy 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.

Zeo Energy ROC % Related Terms

Thank you for viewing the detailed overview of Zeo Energy's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Zeo Energy Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Zeo Energy Corp (NAS:ZEO) » Definitions » ROC %
Comparable Companies
Traded in Other Exchanges
N/A
Address
7625 little Road, Suite 200A, New Port Richley, FL, USA, 34654
Website
https://investors.zeoenergy.com
Zeo Energy Corp is a vertically integrated provider of residential solar energy systems, other energy efficient equipment and related services currently serving customers in Florida, Texas, Arkansas, and Missouri. Its primary business activity is selling and installing residential solar energy systems that homeowners use to supplement the amount of usable electricity required to power their homes.