Liberty Defense Holdings (Liberty Defense Holdings) ROIC % : -119.87% (As of Mar. 2024)

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What is Liberty Defense Holdings 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 %. Liberty Defense Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was -119.87%.

As of today (2024-06-22), Liberty Defense Holdings's WACC % is 5.67%. Liberty Defense Holdings's ROIC % is -149.46% (calculated using TTM income statement data). Liberty Defense Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Liberty Defense Holdings ROIC % Historical Data

The historical data trend for Liberty Defense Holdings'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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Liberty Defense Holdings ROIC % Chart

Liberty Defense Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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-2,531.54

-65.30

-271.88

-244.54

-178.74

Liberty Defense Holdings Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROIC %	Get a 7-Day Free Trial															-155.11	-165.76	-112.65	-207.36	-119.87

Competitive Comparison of Liberty Defense Holdings's ROIC %

For the Security & Protection Services subindustry, Liberty Defense Holdings'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.

Liberty Defense Holdings's ROIC % Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Liberty Defense Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Liberty Defense Holdings's ROIC % falls into.

Liberty Defense Holdings ROIC % Calculation

Liberty Defense Holdings'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 )
=	-9.107 * ( 1 - 0% )	/	( (4.892	+	5.298)	/ 2 )
=	-9.107	/	5.095
=	-178.74 %

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	))
=	6.234	-	1.476	-	( 0.677	-	max(0, 1.629	-	1.495	+	0.677	))
=	4.892

	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	))
=	5.832	-	4.97	-	( 0.001	-	max(0, 5.957	-	1.521	+	0.001	))
=	5.298

Liberty Defense Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROIC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-6.628 * ( 1 - 0% )	/	( (5.298	+	5.761)	/ 2 )
=	-6.628	/	5.5295
=	-119.87 %

where

	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	))
=	5.832	-	4.97	-	( 0.001	-	max(0, 5.957	-	1.521	+	0.001	))
=	5.298

	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	))
=	5.82	-	4.238	-	( 0.397	-	max(0, 6.063	-	1.884	+	0.397	))
=	5.761

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

Liberty Defense Holdings (OTCPK:LDDFF) 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, Liberty Defense Holdings's WACC % is 5.67%. Liberty Defense Holdings's ROIC % is -149.46% (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.

Liberty Defense Holdings ROIC % Related Terms

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Liberty Defense Holdings (Liberty Defense Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Liberty Defense Holdings Ltd (OTCPK:LDDFF) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

LD2A:Germany SCAN:Canada

Address

187 Ballardvale Street, Suite 110, Wilmington, MA, USA, 01887

Website

https://www.libertydefense.com

Liberty Defense Holdings Ltd provides multi-technology security solutions for concealed weapons and threat detection in high-volume foot traffic areas and locations requiring enhanced walk-through security such as airports, stadiums, and schools. Liberty's HEXWAVE product, licensed from the Massachusetts Institute of Technology, with patents related to active 3D radar imaging technology, provides layered, stand-off detection capability of metallic and non-metallic weapons. The company has also licensed the millimeter wave-based, High-Definition Advanced Imaging Technology body scanner and shoe scanner technologies as part of its technology portfolio. It is committed towards protecting communities and preserving peace of mind through next-generation security detection solutions.