CubicFarm Systems (CubicFarm Systems) ROC % : -63.36% (As of Sep. 2023)

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What is CubicFarm Systems 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 %. CubicFarm Systems's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was -63.36%.

As of today (2024-06-10), CubicFarm Systems's WACC % is 14.70%. CubicFarm Systems's ROC % is -105.99% (calculated using TTM income statement data). CubicFarm Systems earns returns that do not match up to its cost of capital. It will destroy value as it grows.

CubicFarm Systems ROC % Historical Data

The historical data trend for CubicFarm Systems'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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CubicFarm Systems ROC % Chart

CubicFarm Systems Annual Data

Trend

Jun18

Jun19

Jun20

Dec21

Dec22

ROC %

-73.38

-135.40

-77.70

-138.36

-167.95

CubicFarm Systems Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23
ROC %	Get a 7-Day Free Trial															-90.12	-177.13	-93.21	-80.06	-63.36

CubicFarm Systems ROC % Calculation

CubicFarm Systems's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	-28.474 * ( 1 - 1.3% )	/	( (21.096	+	12.37)	/ 2 )
=	-28.103838	/	16.733
=	-167.95 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	42.716	-	4.916	-	( 16.704	-	max(0, 7.641	-	27.615	+	16.704	))
=	21.096

	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	))
=	17.503	-	6.552	-	( 2.168	-	max(0, 16.743	-	15.324	+	2.168	))
=	12.37

CubicFarm Systems's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-7.004 * ( 1 - 0% )	/	( (9.474	+	12.634)	/ 2 )
=	-7.004	/	11.054
=	-63.36 %

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	))
=	12.271	-	6.7	-	( 0.201	-	max(0, 15.269	-	11.366	+	0.201	))
=	9.474

	Invested Capital		(Q: Sep. 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	))
=	13.947	-	6.957	-	( 0.43	-	max(0, 17.339	-	11.695	+	0.43	))
=	12.634

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) data.

CubicFarm Systems (OTCPK:CUBXF) 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, CubicFarm Systems's WACC % is 14.70%. CubicFarm Systems's ROC % is -105.99% (calculated using TTM income statement data). CubicFarm Systems 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.

CubicFarm Systems ROC % Related Terms

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CubicFarm Systems (CubicFarm Systems) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Farm & Heavy Construction Machinery » CubicFarm Systems Corp (OTCPK:CUBXF) » Definitions » ROC %

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CUB:Canada

Address

7170 Glover Road, Langley, BC, CAN, V2Y 2R1

Website

https://www.cubicfarms.com

CubicFarm Systems Corp is an ag-tech company providing automated growing systems for fresh produce and animal feed using HydroGreen Nutrition Technology. It offers turnkey, commercial scale, hydroponic, localized food supply solution automated controlled-environment growing systems that can grow predictably and sustainably anywhere on earth. The company enables its customers to grow locally and to provide their markets with safe, sustainable, secure, and fresh ingredients that are consistent in color, size, taste, and nutrition and allows for longer shelf life. The Company has patented technology for auto harvesting and processing methods for growing leafy greens and other crops onsite, indoors, all year round.