Western Sierra Resource (Western Sierra Resource) ROIC % : -2.30% (As of Sep. 2008)

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What is Western Sierra Resource 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 %. Western Sierra Resource's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2008 was -2.30%.

As of today (2024-05-27), Western Sierra Resource's WACC % is 0.00%. Western Sierra Resource's ROIC % is 0.00% (calculated using TTM income statement data). Western Sierra Resource earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Western Sierra Resource ROIC % Historical Data

The historical data trend for Western Sierra Resource'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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Western Sierra Resource ROIC % Chart

Western Sierra Resource Annual Data

Trend

Dec98

Dec99

Dec00

Dec01

Dec02

Dec03

Dec04

Dec05

Dec06

Dec07

ROIC %

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-104.19

-113.67

-51.20

-27.00

-8.64

Western Sierra Resource Quarterly Data
	Dec03	Mar04	Jun04	Sep04	Dec04	Mar05	Jun05	Sep05	Dec05	Mar06	Jun06	Sep06	Dec06	Mar07	Jun07	Sep07	Dec07	Mar08	Jun08	Sep08
ROIC %	Get a 7-Day Free Trial															-8.78	-7.50	-13.01	-3.28	-2.30

Competitive Comparison of Western Sierra Resource's ROIC %

For the Drug Manufacturers - Specialty & Generic subindustry, Western Sierra Resource'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.

Western Sierra Resource's ROIC % Distribution in the Drug Manufacturers Industry

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

* The bar in red indicates where Western Sierra Resource's ROIC % falls into.

Western Sierra Resource ROIC % Calculation

Western Sierra Resource's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2007 is calculated as:

	ROIC % (A: Dec. 2007 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2006 )	+	Invested Capital (A: Dec. 2007 ))	/ count )
=	-0.237 * ( 1 - 0% )	/	( (2.541	+	2.945)	/ 2 )
=	-0.237	/	2.743
=	-8.64 %

where

	Invested Capital		(A: Dec. 2006 )
=	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	))
=	2.45	-	0.21	-	( 0.016	-	max(0, 0.317	-	0.016	+	0.016	))
=	2.541

	Invested Capital		(A: Dec. 2007 )
=	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	))
=	2.742	-	0.42	-	( 0.004	-	max(0, 0.627	-	0.004	+	0.004	))
=	2.945

Western Sierra Resource's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2008 is calculated as:

	ROIC % (Q: Sep. 2008 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2008 )	+	Invested Capital (Q: Sep. 2008 ))	/ count )
=	-0.488 * ( 1 - 0% )	/	( (21.28	+	21.19)	/ 2 )
=	-0.488	/	21.235
=	-2.30 %

where

	Invested Capital		(Q: Jun. 2008 )
=	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	))
=	21.108	-	0.54	-	( 0	-	max(0, 0.797	-	0.085	+	0	))
=	21.28

	Invested Capital		(Q: Sep. 2008 )
=	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	))
=	21.135	-	0.016	-	( 0.022	-	max(0, 0.124	-	0.053	+	0.022	))
=	21.19

Note: The Operating Income data used here is four times the quarterly (Sep. 2008) data.

Western Sierra Resource (OTCPK:WSRC) 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, Western Sierra Resource's WACC % is 0.00%. Western Sierra Resource's ROIC % is 0.00% (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.

Western Sierra Resource ROIC % Related Terms

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Western Sierra Resource (Western Sierra Resource) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Western Sierra Resource Corp (OTCPK:WSRC) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

1001 Grand Avenue, Suite 207, Glenwood Springs, CO, USA, 81602

Website

https://www.westernsierraresource.com

Western Sierra Resource Corp is a multifaceted resource company and revenue producer focused on applying and expanding its $40,500,000 water rights assets. The beneficial uses of its water rights include growing industrial hemp, manufacturing, and undertaking the related eco-friendly, high-yield, project.