Iris Energy (Iris Energy) ROC % : 5.13% (As of Mar. 2024)

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What is Iris Energy 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 %. Iris Energy's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 5.13%.

As of today (2024-06-10), Iris Energy's WACC % is 10.19%. Iris Energy's ROC % is -5.75% (calculated using TTM income statement data). Iris Energy earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Iris Energy ROC % Historical Data

The historical data trend for Iris Energy'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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Iris Energy ROC % Chart

Iris Energy Annual Data

Trend

Jun20

Jun21

Jun22

Jun23

ROC %

-15.37

-0.23

0.13

-13.54

Iris Energy Quarterly Data
	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Dec22	Mar23	Jun23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial									-15.18	-9.89	-15.52	-3.20	5.13

Iris Energy ROC % Calculation

Iris Energy'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 )
=	-48.446 * ( 1 - -1.41% )	/	( (475.295	+	250.169)	/ 2 )
=	-49.1290886	/	362.732
=	-13.54 %

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	))
=	570.46	-	20.017	-	( 109.97	-	max(0, 85.106	-	160.254	+	109.97	))
=	475.295

	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	))
=	332.074	-	16.676	-	( 68.894	-	max(0, 24.001	-	89.23	+	68.894	))
=	250.169

Iris Energy'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 )
=	26.492 * ( 1 - 28.68% )	/	( (311.751	+	424.248)	/ 2 )
=	18.8940944	/	367.9995
=	5.13 %

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	))
=	417.167	-	28.573	-	( 91.587	-	max(0, 32.343	-	109.186	+	91.587	))
=	311.751

	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	))
=	723.603	-	36.235	-	( 263.12	-	max(0, 41.5	-	310.193	+	263.12	))
=	424.248

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

Iris Energy (NAS:IREN) 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, Iris Energy's WACC % is 10.19%. Iris Energy's ROC % is -5.75% (calculated using TTM income statement data). Iris Energy 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.

Iris Energy ROC % Related Terms

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Iris Energy (Iris Energy) Business Description

Industry

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F8P:Germany

Address

44 Market Street, Level 12, Sydney, NSW, AUS, 2000

Website

https://www.irisenergy.co

Iris Energy Ltd is a Bitcoin mining company. It builds, owns, and operates data centers and electrical infrastructure for the mining of Bitcoin powered by renewable energy. The company's mining operations generate revenue by earning Bitcoin through a combination of block rewards and transaction fees from the operation of its specialized computers called Application-specific Integrated Circuits and exchanging these Bitcoin for currencies such as USD or CAD on a daily basis.