Widgie Nickel (ASX:WIN) ROC % : -6.27% (As of Dec. 2023)

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What is Widgie Nickel 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 %. Widgie Nickel's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -6.27%.

As of today (2024-06-04), Widgie Nickel's WACC % is 10.14%. Widgie Nickel's ROC % is -6.58% (calculated using TTM income statement data). Widgie Nickel earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Widgie Nickel ROC % Historical Data

The historical data trend for Widgie Nickel'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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Widgie Nickel ROC % Chart

Widgie Nickel Annual Data

Trend

Jun23

ROC %

-6.44

Widgie Nickel Semi-Annual Data
	Dec20	Dec21	Dec22	Jun23	Dec23
ROC %	-	-20.38	-11.88	-6.89	-6.27

Widgie Nickel ROC % Calculation

Widgie Nickel'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: . 20 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	* ( 1 - % )	/	( (	+	)	/ )
=		/
=	%

where

Invested Capital

(A: . 20 )

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

))

(

max(0,

))

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

))

(

max(0,

))

Widgie Nickel'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 )
=	-2.396 * ( 1 - 0% )	/	( (35.085	+	41.322)	/ 2 )
=	-2.396	/	38.2035
=	-6.27 %

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	))
=	46.958	-	3.303	-	( 11.845	-	max(0, 3.543	-	12.113	+	11.845	))
=	35.085

	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	))
=	43.827	-	1.26	-	( 2.585	-	max(0, 1.473	-	2.718	+	2.585	))
=	41.322

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

Widgie Nickel (ASX:WIN) 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, Widgie Nickel's WACC % is 10.14%. Widgie Nickel's ROC % is -6.58% (calculated using TTM income statement data). Widgie Nickel 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.

Widgie Nickel ROC % Related Terms

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Widgie Nickel (ASX:WIN) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Widgie Nickel Ltd (ASX:WIN) » Definitions » ROC %

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Traded in Other Exchanges

WDGNF:USA

Address

220 St Georges Terrace, Level 4, Perth, WA, AUS, 6000

Website

https://www.widgienickel.com.au

Widgie Nickel Ltd is a nickel exploration and development company. Its projects include Widgie South, Widgie North, Widgie West, and Lake Eaton-Mt Eaton. The company operates in given segments comprised of exploration and development activities over the Mt Edwards Project. It operates in a single geographical area which is Australia.

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