ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Little Green Pharma's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 2.66%.
As of today (2026-06-26), Little Green Pharma's WACC % is 3.65%. Little Green Pharma's ROIC % is 2.15% (calculated using TTM income statement data).
Little Green Pharma earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Little Green Pharma (ASX:LGP) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Little Green Pharma's WACC % is 3.65%. Little Green Pharma's ROIC % is 2.15% (calculated using TTM income statement data).
Little Green 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 %, ROIC % 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.
Little Green Pharma ROIC % Related Terms
Little Green Pharma ROIC % Historical Data
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The historical data trend for Little Green Pharma's ROIC % 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.
For the Drug Manufacturers - Specialty & Generic subindustry, Little Green Pharma's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Little Green Pharma ROIC % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Little Green Pharma's ROIC % distribution charts can be found below:
* The bar in red indicates where Little Green Pharma's ROIC % falls into.
Note:
The Operating Income data used here is two times the semi-annual (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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.
Little Green Pharma (ASX:LGP) has a ROIC % of 2.66% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Little Green Pharma and its competitors.
Is Little Green Pharma's ROIC % too high?
Little Green Pharma's current ROIC % is 2.66%. The Drug Manufacturers industry median ROIC % is 4.44. Little Green Pharma's value of 2.66% is 40.1% below this industry median.
How does Little Green Pharma's ROIC % compare to ZTS?
Little Green Pharma's ROIC % of 2.66% can be compared against companies in the Drug Manufacturers industry. The industry median ROIC % is 4.44. Little Green Pharma's value of 2.66% is 40.1% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Drug Manufacturers company?
The median ROIC % among Drug Manufacturers companies is 4.44, based on 985 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Little Green Pharma's current ROIC % of 2.66% is 40.1% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Little Green Pharma and its competitors. For the Drug Manufacturers industry, the median ROIC % is 4.44 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Little Green Pharma's current ROIC % is 2.66%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Little Green Pharma stock overvalued right now?
Based on GuruFocus' analysis, Little Green Pharma (ASX:LGP) is currently considered Significantly Undervalued. The stock's GF Value™ is A$0.17, compared to a current price of A$0.06 — trading 62.4% below its estimated fair value. The current ROIC % is 2.66% and 40.1% below the Drug Manufacturers industry median of 4.44. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Little Green Pharma (ASX:LGP), the current ROIC % is 2.66% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Little Green Pharma Ltd is engaged in the vertically integrated medicinal cannabis business. The business activities of the company include cultivation, production, research and development, manufacturing, and distribution of medicinal cannabis products. The company's two key types of products available at Little Green Pharma are oils (which are ingested) and flowers (which are usually inhaled through vaporizing). It offers LGP-branded medicinal cannabis oil products in the Australian and European markets. The Group is organized into two operating segments: Australia and Europe (cultivation, production and distribution of cannabis products to Australian and European customers).
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