WA1 Resources (ASX:WA1) ROC % : -29.19% (As of Dec. 2023)

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What is WA1 Resources 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 %. WA1 Resources's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -29.19%.

As of today (2024-06-08), WA1 Resources's WACC % is 10.27%. WA1 Resources's ROC % is -24.38% (calculated using TTM income statement data). WA1 Resources earns returns that do not match up to its cost of capital. It will destroy value as it grows.

WA1 Resources ROC % Historical Data

The historical data trend for WA1 Resources'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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WA1 Resources ROC % Chart

WA1 Resources Annual Data

Trend

Jun22

Jun23

ROC %

-70.00

-56.49

WA1 Resources Semi-Annual Data
	Jun21	Jun22	Dec22	Jun23	Dec23
ROC %	-	-	-87.54	-21.43	-29.19

WA1 Resources ROC % Calculation

WA1 Resources'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 )
=	-2.22 * ( 1 - 0% )	/	( (0.89	+	6.97)	/ 2 )
=	-2.22	/	3.93
=	-56.49 %

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	))
=	4.691	-	0.123	-	( 3.678	-	max(0, 0.132	-	3.832	+	3.678	))
=	0.89

	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	))
=	24.799	-	2.114	-	( 16.998	-	max(0, 2.234	-	17.949	+	16.998	))
=	6.97

WA1 Resources'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 )
=	-3.614 * ( 1 - 0% )	/	( (6.97	+	17.792)	/ 2 )
=	-3.614	/	12.381
=	-29.19 %

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	))
=	24.799	-	2.114	-	( 16.998	-	max(0, 2.234	-	17.949	+	16.998	))
=	6.97

	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	))
=	36.996	-	1.136	-	( 18.73	-	max(0, 1.302	-	19.37	+	18.73	))
=	17.792

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

WA1 Resources (ASX:WA1) 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, WA1 Resources's WACC % is 10.27%. WA1 Resources's ROC % is -24.38% (calculated using TTM income statement data). WA1 Resources 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.

WA1 Resources ROC % Related Terms

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WA1 Resources (ASX:WA1) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » WA1 Resources Ltd (ASX:WA1) » Definitions » ROC %

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Traded in Other Exchanges

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Address

55 Carrington Street, Level 2, Nedlands, WA, AUS, 6009

Website

https://www.wa1.com.au

WA1 Resources Ltd is a mineral development in Western Australia and the Northern Territory. Its projects include West Arunta, Madura, and Hidden Valley.

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