Alpha Cognition (Alpha Cognition) ROC % : -735.16% (As of Mar. 2024)

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What is Alpha Cognition ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Alpha Cognition's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -735.16%.

As of today (2024-06-10), Alpha Cognition's WACC % is 25.93%. Alpha Cognition's ROC % is -690.89% (calculated using TTM income statement data). Alpha Cognition earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Alpha Cognition ROC % Historical Data

The historical data trend for Alpha Cognition's ROC % 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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Alpha Cognition ROC % Chart

Alpha Cognition Annual Data

Trend

Dec20

Dec21

Dec22

Dec23

ROC %

-139.21

-393.30

-646.63

-389.71

Alpha Cognition Quarterly Data
	Jan20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial										-531.27	-1,447.80	-659.64	-348.51	-735.16

Alpha Cognition ROC % Calculation

Alpha Cognition's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-9.618 * ( 1 - 0% )	/	( (2.38	+	2.556)	/ 2 )
=	-9.618	/	2.468
=	-389.71 %

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	))
=	2.951	-	2.295	-	( 2.084	-	max(0, 4.057	-	2.333	+	2.084	))
=	2.38

	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	))
=	2.452	-	0.603	-	( 1.404	-	max(0, 2.625	-	1.918	+	1.404	))
=	2.556

Alpha Cognition's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-17.28 * ( 1 - 0% )	/	( (2.556	+	2.145)	/ 2 )
=	-17.28	/	2.3505
=	-735.16 %

where

	Invested Capital		(Q: 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	))
=	2.452	-	0.603	-	( 1.404	-	max(0, 2.625	-	1.918	+	1.404	))
=	2.556

	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	))
=	3.477	-	0.641	-	( 2.259	-	max(0, 2.163	-	2.854	+	2.259	))
=	2.145

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

Alpha Cognition (OTCPK:ACOGF) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. 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 ROC % 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, Alpha Cognition's WACC % is 25.93%. Alpha Cognition's ROC % is -690.89% (calculated using TTM income statement data). Alpha Cognition earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % 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.

Alpha Cognition ROC % Related Terms

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Alpha Cognition (Alpha Cognition) Business Description

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ACOG:Canada

Address

301 - 1228 Hamilton Street, Vancouver, BC, CAN, V6B 6L2

Website

https://www.alphacognition.com

Alpha Cognition Inc is a clinical stage, biopharmaceutical company dedicated to developing treatments for patients suffering from neurodegenerative diseases, such as Alzheimer's disease, and Cognitive Impairment with Mild Traumatic Brain Injury (mTBI) for which there are limited or no treatment options. The Company is focused on the development of ALPHA-1062 for the treatment of mild-to-moderate Alzheimer's disease and completed an NDA filing to the FDA in September 2023. The company anticipates an FDA approval in mid-2024. The Company's ALPHA-1062 development program is primarily focused on clinical and regulatory development, Chemistry, Manufacturing and Control (CMC) development, and commercial readiness.