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Neo Performance Materials (TSX:NEO) ROIC % : 0.84% (As of Jun. 2024)


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What is Neo Performance Materials 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 %. Neo Performance Materials's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2024 was 0.84%.

As of today (2024-10-31), Neo Performance Materials's WACC % is 9.27%. Neo Performance Materials's ROIC % is 1.19% (calculated using TTM income statement data). Neo Performance Materials earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Neo Performance Materials ROIC % Historical Data

The historical data trend for Neo Performance Materials'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.

Neo Performance Materials ROIC % Chart

Neo Performance Materials Annual Data
Trend Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial 6.65 0.97 12.57 8.22 -2.52

Neo Performance Materials Quarterly Data
Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24
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 3.89 3.26 -3.27 2.21 0.84

Competitive Comparison of Neo Performance Materials's ROIC %

For the Specialty Chemicals subindustry, Neo Performance Materials'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.


Neo Performance Materials's ROIC % Distribution in the Chemicals Industry

For the Chemicals industry and Basic Materials sector, Neo Performance Materials's ROIC % distribution charts can be found below:

* The bar in red indicates where Neo Performance Materials's ROIC % falls into.



Neo Performance Materials ROIC % Calculation

Neo Performance Materials'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 )
=17.28 * ( 1 - 189.35% )/( (611.111 + 615.685)/ 2 )
=-15.43968/613.398
=-2.52 %

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))
=918.971 - 107.493 - ( 200.367 - max(0, 174.76 - 633.625+200.367))
=611.111

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))
=841.189 - 108.926 - ( 116.578 - max(0, 164.875 - 507.975+116.578))
=615.685

Neo Performance Materials's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2024 is calculated as:

ROIC % (Q: Jun. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2024 ) + Invested Capital (Q: Jun. 2024 ))/ count )
=33.06 * ( 1 - 83.98% )/( (623.857 + 634.802)/ 2 )
=5.296212/629.3295
=0.84 %

where

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))
=848.201 - 86.698 - ( 137.646 - max(0, 148.839 - 498.953+137.646))
=623.857

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))
=851.837 - 79.323 - ( 137.712 - max(0, 145.077 - 479.479+137.712))
=634.802

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


Neo Performance Materials  (TSX:NEO) 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, Neo Performance Materials's WACC % is 9.27%. Neo Performance Materials's ROIC % is 1.19% (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.


Neo Performance Materials ROIC % Related Terms

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Neo Performance Materials Business Description

Traded in Other Exchanges
Address
121 King Street West, Suite 1740, Toronto, ON, CAN, M5H 3T9
Neo Performance Materials Inc is engaged in the innovation, development, processing, and manufacturing of rare earth and rare metal-based functional materials. Its operating segments include Magnequench, Chemicals & Oxides, Rare Metals, and Corporate. The Magnequench segment produces magnetic powders used in bonded and hot-deformed, fully dense neodymium-iron-boron magnets. The Chemicals & Oxides segment manufactures and distributes a broad range of industrial materials. The Rare Metals segment produces specialty metals and their compounds, such as tantalum, niobium, hafnium, rhenium, gallium, and indium. Its geographical segments are Asia, North America, Europe, and Others.
Executives
Kevin Morris Senior Officer
Rahim Suleman Director, Senior Officer
Jonathan Baksh Senior Officer
Claire Marie Catherine Kennedy Director, Senior Officer
Yadin Rozov Director
Gregory Kroll Director or Senior Officer of Insider or Subsidiary (other than in 4,5,6)
Constantine Efthymios Karayannopoulos Director, Senior Officer