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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Disc Medicine's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was -2,052.07%.
As of today (2024-12-13), Disc Medicine's WACC % is 10.01%. Disc Medicine's ROIC % is -2128.21% (calculated using TTM income statement data). Disc Medicine earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Disc Medicine'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.
Disc Medicine Annual Data | |||||||||
Trend | Dec20 | Dec21 | Dec22 | Dec23 | |||||
ROIC % | -170.69 | -216.02 | -662.13 | -1,264.37 |
Disc Medicine Quarterly Data | |||||||||||||||||||
Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | |
ROIC % | Get a 7-Day Free Trial | -2,839.34 | -2,092.52 | -1,804.76 | -2,172.32 | -2,052.07 |
For the Biotechnology subindustry, Disc Medicine'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.
For the Biotechnology industry and Healthcare sector, Disc Medicine's ROIC % distribution charts can be found below:
* The bar in red indicates where Disc Medicine's ROIC % falls into.
Disc Medicine's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:
ROIC % (A: Dec. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2022 ) | + | Invested Capital (A: Dec. 2023 )) | / count ) |
= | -91.125 * ( 1 - -0.13% ) | / | ( (5.644 | + | 8.789) | / 2 ) |
= | -91.2434625 | / | 7.2165 | |||
= | -1,264.37 % |
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 | )) |
= | 200.205 | - | 18.648 | - | ( 194.611 | - | max(0, 22.578 | - | 198.491 | + | 194.611 | )) |
= | 5.644 |
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 | )) |
= | 367.996 | - | 14.984 | - | ( 360.382 | - | max(0, 21.439 | - | 365.662 | + | 360.382 | )) |
= | 8.789 |
Disc Medicine's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2024 is calculated as:
ROIC % (Q: Sep. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Jun. 2024 ) | + | Invested Capital (Q: Sep. 2024 )) | / count ) |
= | -131.424 * ( 1 - -0.43% ) | / | ( (6.228 | + | 6.636) | / 2 ) |
= | -131.9891232 | / | 6.432 | |||
= | -2,052.07 % |
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 | )) |
= | 510.217 | - | 16.058 | - | ( 500.945 | - | max(0, 20.31 | - | 508.241 | + | 500.945 | )) |
= | 6.228 |
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 | )) |
= | 495.145 | - | 20.83 | - | ( 487.363 | - | max(0, 25.473 | - | 493.152 | + | 487.363 | )) |
= | 6.636 |
Note: The Operating Income data used here is four times the quarterly (Sep. 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.
Disc Medicine (NAS:IRON) 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, Disc Medicine's WACC % is 10.01%. Disc Medicine's ROIC % is -2128.21% (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.
Thank you for viewing the detailed overview of Disc Medicine's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
William Richard White | director | C/O AKERO THERAPEUTICS, INC., 170 HARBOR WAY 2ND FLOOR, SOUTH SAN FRANCISCO CA 94080 |
William Jacob Savage | officer: Chief Medical Officer | C/O DISC MEDICINE, INC., 321 ARSENAL STREET, SUITE 101, WATERTOWN MA 02472 |
Orbimed Advisors Llc | director, 10 percent owner | 601 LEXINGTON AVENUE, 54TH FLOOR, NEW YORK NY 10022 |
Kevin Bitterman | director | C/O POLARIS VENTURE PARTNERS, 1000 WINTER STREET, SUITE 3350, WALTHAM MA 02451 |
Mona Ashiya | director, 10 percent owner | C/O SIERRA ONCOLOGY, INC., 2150 - 885 WEST GEORGIA STREET, VANCOUVER, BRITISH COLUMBIA Z4 V6C 3E8 |
Atlas Venture Fund X, L.p. | 10 percent owner | 400 TECHNOLOGY SQUARE, 10TH FLOOR, CAMBRIDGE MA 02139 |
Joanne Bryce | officer: Chief Financial Officer | C/O DISC MEDICINE, INC., 321 ARSENAL STREET, SUITE 101, WATERTOWN MA 02472 |
Rahul Khara | officer: General Counsel | C/O DISC MEDICINE, INC., 321 ARSENAL STREET, SUITE 101, WATERTOWN MA 02472 |
Brian Richard Macdonald | officer: Chief Innovation Officer | C/O DISC MEDICINE, INC., 321 ARSENAL STREET, SUITE 101, WATERTOWN MA 02472 |
Novo Holdings A/s | 10 percent owner | TUBORG HAVNEVEJ 19, HELLERUP G7 2900 |
Ai Dmi Llc | 10 percent owner | C/O ACCESS INDUSTRIES, INC., 40 WEST 57TH STREET, 28TH FLOOR, NEW YORK NY 10019 |
Atlas Venture Associates Opportunity I, Llc | 10 percent owner | 400 TECHNOLOGY SQUARE, 10TH FLOOR, CAMBRIDGE MA 02139 |
Atlas Venture Associates Opportunity I, L.p. | 10 percent owner | 400 TECHNOLOGY SQUARE, 10TH FLOOR, CAMBRIDGE MA 02139 |
Atlas Venture Associates X, Llc | 10 percent owner | 400 TECH. SQ., 10TH FLOOR, CAMBRIDGE MA 02139 |
Access Industries Holdings Llc | 10 percent owner | C/O ACCESS INDUSTRIES MANAGEMENT, LLC., 730 FIFTH AVENUE, 20TH FLOOR, NEW YORK NY 10019 |
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