Greenfern Industries (NZSE:GFI) ROIC % : -57.47% (As of Mar. 2023)

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What is Greenfern Industries 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 %. Greenfern Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2023 was -57.47%.

As of today (2024-05-26), Greenfern Industries's WACC % is 10.94%. Greenfern Industries's ROIC % is -57.47% (calculated using TTM income statement data). Greenfern Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Greenfern Industries ROIC % Historical Data

The historical data trend for Greenfern Industries'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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Greenfern Industries ROIC % Chart

Greenfern Industries Annual Data

Trend

Mar22

Mar23

ROIC %

-79.22

-57.47

Greenfern Industries Semi-Annual Data
	Mar22	Mar23
ROIC %	-79.22	-57.47

Competitive Comparison of Greenfern Industries's ROIC %

For the Drug Manufacturers - Specialty & Generic subindustry, Greenfern Industries'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.

Greenfern Industries's ROIC % Distribution in the Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, Greenfern Industries's ROIC % distribution charts can be found below:

* The bar in red indicates where Greenfern Industries's ROIC % falls into.

Greenfern Industries ROIC % Calculation

Greenfern Industries's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROIC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	-1.752 * ( 1 - 0% )	/	( (2.921	+	3.176)	/ 2 )
=	-1.752	/	3.0485
=	-57.47 %

where

	Invested Capital		(A: Mar. 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	))
=	4.218	-	0.383	-	( 0.914	-	max(0, 0.383	-	1.777	+	0.914	))
=	2.921

	Invested Capital		(A: Mar. 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	))
=	4.346	-	0.431	-	( 0.923	-	max(0, 1.082	-	1.821	+	0.923	))
=	3.176

Greenfern Industries's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2023 is calculated as:

	ROIC % (Q: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2022 )	+	Invested Capital (Q: Mar. 2023 ))	/ count )
=	-1.752 * ( 1 - 0% )	/	( (2.921	+	3.176)	/ 2 )
=	-1.752	/	3.0485
=	-57.47 %

where

	Invested Capital		(Q: Mar. 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	))
=	4.218	-	0.383	-	( 0.914	-	max(0, 0.383	-	1.777	+	0.914	))
=	2.921

	Invested Capital		(Q: Mar. 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	))
=	4.346	-	0.431	-	( 0.923	-	max(0, 1.082	-	1.821	+	0.923	))
=	3.176

Note: The Operating Income data used here is one times the annual (Mar. 2023) data.

Greenfern Industries (NZSE:GFI) 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, Greenfern Industries's WACC % is 10.94%. Greenfern Industries's ROIC % is -57.47% (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.

Greenfern Industries ROIC % Related Terms

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Greenfern Industries (NZSE:GFI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Greenfern Industries Ltd (NZSE:GFI) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

115 Queen Street, Level 8, General Capital House, Auckland, NTL, NZL, 1040

Website

https://www.gfi.nz

Greenfern Industries Ltd is committed to the environmentally friendly production of medicinal cannabis and hemp-based products. It operates in two segments, Cannabis and therapeutics products the operations of this segment reflect the activities of manufacture and distribution of cannabis products, Electricity generation this segment includes the generation and distribution of electricity. The hemp seed and its by-products are used for a range of different products from a high protein ingredient in a plant-based meat substitute, a hemp-based skincare range, and hemp-based beverages amongst other things.