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Novo Resources (TSX:NVO) ROIC % : -20.70% (As of Sep. 2024)


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What is Novo 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 %. Novo Resources's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was -20.70%.

As of today (2024-12-13), Novo Resources's WACC % is 11.34%. Novo Resources's ROIC % is -22.23% (calculated using TTM income statement data). Novo Resources earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Novo Resources ROIC % Historical Data

The historical data trend for Novo 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.

Novo Resources ROIC % Chart

Novo Resources Annual Data
Trend Jan14 Jan15 Jan16 Jan17 Jan18 Jan19 Jan20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only -17.99 -10.93 1.56 -9.79 -19.87

Novo Resources Quarterly Data
Oct19 Jan20 Apr20 Jul20 Oct20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
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 -12.24 -23.20 -25.90 -26.45 -20.70

Competitive Comparison of Novo Resources's ROIC %

For the Gold subindustry, Novo 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.


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

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

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



Novo Resources ROIC % Calculation

Novo Resources'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 )
=-30.354 * ( 1 - 1% )/( (210.866 + 91.633)/ 2 )
=-30.05046/151.2495
=-19.87 %

where

Novo Resources'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 )
=-19.332 * ( 1 - 0% )/( (92.923 + 93.816)/ 2 )
=-19.332/93.3695
=-20.70 %

where

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.


Novo Resources  (TSX:NVO) 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, Novo Resources's WACC % is 11.34%. Novo Resources's ROIC % is -22.23% (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.


Novo Resources ROIC % Related Terms

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Novo Resources Business Description

Traded in Other Exchanges
Address
1199 West Hastings Street, Vancouver, BC, CAN, V6E 3T5
Novo Resources Corp is a company engaged in the business of evaluating, acquiring, and exploring natural resource properties with a focus on gold. The organization has business interests in properties located in Australia, Canada, and the USA. Its projects include Beatons Creek Property, Millennium Property, Blue Spec; Paleo-Placer; Comet Well, and others. It has two segments Mining operations and exploration operations.
Executives
Quinton Todd Hennigh Director
Michael Charles Barrett Director
Ronan Joseph Sabo-walsh Senior Officer
Robert James Humphryson Senior Officer
Kirkland Lake Gold Ltd. 10% Security Holder
Eric Sprott 10% Security Holder
Leonidas Karabelas Senior Officer
Gregory Gibson Director