Evolution Mining (ASX:EVN) ROC % : 5.20% (As of Dec. 2023)

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What is Evolution Mining 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 %. Evolution Mining's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 5.20%.

As of today (2024-05-28), Evolution Mining's WACC % is 12.99%. Evolution Mining's ROC % is 4.50% (calculated using TTM income statement data). Evolution Mining earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Evolution Mining ROC % Historical Data

The historical data trend for Evolution Mining'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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Evolution Mining ROC % Chart

Evolution Mining Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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8.86

12.75

10.65

6.74

4.35

Evolution Mining Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															5.90	7.94	4.67	3.83	5.20

Evolution Mining ROC % Calculation

Evolution Mining's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	396.993 * ( 1 - 30.07% )	/	( (6074.492	+	6678.718)	/ 2 )
=	277.6172049	/	6376.605
=	4.35 %

where

	Invested Capital		(A: Jun. 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	))
=	6630.066	-	407.341	-	( 572.427	-	max(0, 861.888	-	1010.121	+	572.427	))
=	6074.492

	Invested Capital		(A: Jun. 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	))
=	6752.385	-	466.12	-	( 46.146	-	max(0, 909.916	-	517.463	+	46.146	))
=	6678.718

Evolution Mining's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	537.586 * ( 1 - 30.45% )	/	( (6678.718	+	7697.898)	/ 2 )
=	373.891063	/	7188.308
=	5.20 %

where

	Invested Capital		(Q: Jun. 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	))
=	6752.385	-	466.12	-	( 46.146	-	max(0, 909.916	-	517.463	+	46.146	))
=	6678.718

	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	))
=	8248.202	-	588.488	-	( 191.037	-	max(0, 782.785	-	744.601	+	191.037	))
=	7697.898

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Evolution Mining (ASX:EVN) 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, Evolution Mining's WACC % is 12.99%. Evolution Mining's ROC % is 4.50% (calculated using TTM income statement data). Evolution Mining 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.

Evolution Mining ROC % Related Terms

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Evolution Mining (ASX:EVN) Business Description

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CAHPF:USA WE7:Germany

Address

175 Liverpool Street, Level 24, Sydney, NSW, AUS, 2000

Website

https://www.evolutionmining.com.au

Evolution Mining is an Australian-based gold miner. It sold around 650,000 ounces of gold in fiscal 2023 from five wholly owned mines in Australia and Canada. Formed in 2011 via the merger of Conquest Mining and Catalpa Resources and the purchase of Newcrest Mining's Mt Rawdon and Cracow mines, Evolution has acquired more mines and sold the generally less attractive, higher-cost mines. Cowal and Mungari were bought in 2015, with an initial interest in Glencore's Ernest Henry mine following in 2016, Red Lake in Canada in 2020, and the rest of Ernest Henry in 2022. It has also agreed to buy an 80% stake in the Northparkes copper and gold mine in New South Wales, likely effective January 2024. It had roughly 13 years of gold reserves at end fiscal 2023.