Paradigm Biopharmaceuticals (ASX:PAR) ROIC % : -2,420.50% (As of Dec. 2023)

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What is Paradigm Biopharmaceuticals ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Paradigm Biopharmaceuticals's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -2,420.50%.

As of today (2024-12-12), Paradigm Biopharmaceuticals's WACC % is 13.66%. Paradigm Biopharmaceuticals's ROIC % is -1298.67% (calculated using TTM income statement data). Paradigm Biopharmaceuticals earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Paradigm Biopharmaceuticals ROIC % Historical Data

The historical data trend for Paradigm Biopharmaceuticals'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.

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Paradigm Biopharmaceuticals ROIC % Chart

Paradigm Biopharmaceuticals Annual Data

Trend

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

ROIC %

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-342.88

-601.44

-736.45

-1,424.92

-1,194.78

Paradigm Biopharmaceuticals Semi-Annual Data
	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROIC %	Get a 7-Day Free Trial													-950.09	-1,575.83	-1,295.74	-2,420.50	-546.86

Competitive Comparison of Paradigm Biopharmaceuticals's ROIC %

For the Biotechnology subindustry, Paradigm Biopharmaceuticals'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.

Paradigm Biopharmaceuticals's ROIC % Distribution in the Biotechnology Industry

For the Biotechnology industry and Healthcare sector, Paradigm Biopharmaceuticals's ROIC % distribution charts can be found below:

* The bar in red indicates where Paradigm Biopharmaceuticals's ROIC % falls into.

Paradigm Biopharmaceuticals ROIC % Calculation

Paradigm Biopharmaceuticals's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2024 is calculated as:

	ROIC % (A: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2023 )	+	Invested Capital (A: Jun. 2024 ))	/ count )
=	-65.193 * ( 1 - 0% )	/	( (4.165	+	6.748)	/ 2 )
=	-65.193	/	5.4565
=	-1,194.78 %

where

	Invested Capital		(A: Jun. 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	))
=	67.07	-	12.161	-	( 56.333	-	max(0, 13.042	-	63.786	+	56.333	))
=	4.165

	Invested Capital		(A: 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	))
=	27.39	-	2.821	-	( 17.821	-	max(0, 3.36	-	24.253	+	17.821	))
=	6.748

Paradigm Biopharmaceuticals's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-100.596 * ( 1 - 0% )	/	( (4.165	+	4.147)	/ 2 )
=	-100.596	/	4.156
=	-2,420.50 %

where

	Invested Capital		(Q: Jun. 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	))
=	67.07	-	12.161	-	( 56.333	-	max(0, 13.042	-	63.786	+	56.333	))
=	4.165

	Invested Capital		(Q: 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	))
=	45.039	-	9.986	-	( 33.551	-	max(0, 10.922	-	41.828	+	33.551	))
=	4.147

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Paradigm Biopharmaceuticals (ASX:PAR) 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, Paradigm Biopharmaceuticals's WACC % is 13.66%. Paradigm Biopharmaceuticals's ROIC % is -1298.67% (calculated using TTM income statement data).

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.

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Paradigm Biopharmaceuticals Business Description

Industry

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PBIGF:USA

Address

500 Collins Street, Level 15, Melbourne, VIC, AUS, 3000

Website

https://www.paradigmbiopharma.com

Paradigm Biopharmaceuticals Ltd is a late-stage clinical development company engaged in the research and development of therapeutic products for human use in Australia. The firm is engaged in developing injectable pentosan polysulphate sodium (iPPS) for the treatment of pain associated with musculoskeletal disorders driven by injury, inflammation, aging, degenerative disease, infection, or genetic predisposition. The company has registered the trademarks Zilosul and Rhinosul for the commercialization of iPPS.