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Novagold Resources (STU:NGR) ROIC % : -260.40% (As of Aug. 2024)


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What is Novagold Resources 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 %. Novagold Resources's annualized return on invested capital (ROIC %) for the quarter that ended in Aug. 2024 was -260.40%.

As of today (2024-12-14), Novagold Resources's WACC % is 13.13%. Novagold Resources's ROIC % is -338.27% (calculated using TTM income statement data). Novagold Resources earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Novagold Resources ROIC % Historical Data

The historical data trend for Novagold Resources'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.

* Premium members only.

Novagold Resources ROIC % Chart

Novagold Resources Annual Data
Trend Nov14 Nov15 Nov16 Nov17 Nov18 Nov19 Nov20 Nov21 Nov22 Nov23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only -14.86 -14.92 -28.01 -67.29 -110.72

Novagold Resources Quarterly Data
Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24 May24 Aug24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -105.55 -330.25 -352.41 -401.44 -260.40

Competitive Comparison of Novagold Resources's ROIC %

For the Gold subindustry, Novagold Resources'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.


Novagold Resources's ROIC % Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Novagold Resources's ROIC % distribution charts can be found below:

* The bar in red indicates where Novagold Resources's ROIC % falls into.



Novagold Resources ROIC % Calculation

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

ROIC % (A: Nov. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Nov. 2022 ) + Invested Capital (A: Nov. 2023 ))/ count )
=-19.592 * ( 1 - -0.08% )/( (29.436 + 5.983)/ 2 )
=-19.6076736/17.7095
=-110.72 %

where

Novagold Resources's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Aug. 2024 is calculated as:

ROIC % (Q: Aug. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: May. 2024 ) + Invested Capital (Q: Aug. 2024 ))/ count )
=-18.576 * ( 1 - -1.47% )/( (7.339 + 7.138)/ 2 )
=-18.8490672/7.2385
=-260.40 %

where

Note: The Operating Income data used here is four times the quarterly (Aug. 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.


Novagold Resources  (STU:NGR) 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, Novagold Resources's WACC % is 13.13%. Novagold Resources's ROIC % is -338.27% (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.


Novagold Resources ROIC % Related Terms

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Novagold Resources Business Description

Traded in Other Exchanges
Address
201 South Main Street, Suite 400, Salt Lake City, UT, USA, 84111
Novagold Resources Inc is a mineral exploration company engaged in the exploration and development of mineral properties. The company owns 50% of the Donlin Gold project, which is located in southwestern Alaska, approximately 20 kilometers north of the village of Crooked Creek on the Kuskokwim River.

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