Lombard Medical Technologies (LSE:LMT) ROC % : -115.12% (As of Dec. 2012)

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What is Lombard Medical Technologies 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 %. Lombard Medical Technologies's annualized return on capital (ROC %) for the quarter that ended in Dec. 2012 was -115.12%.

As of today (2024-06-06), Lombard Medical Technologies's WACC % is 0.00%. Lombard Medical Technologies's ROC % is -64.66% (calculated using TTM income statement data). Lombard Medical Technologies earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Lombard Medical Technologies ROC % Historical Data

The historical data trend for Lombard Medical Technologies'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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Lombard Medical Technologies ROC % Chart

Lombard Medical Technologies Annual Data

Trend

Sep02

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

ROC %

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-164.82

-119.89

-150.88

-180.65

-122.80

Lombard Medical Technologies Semi-Annual Data
	Sep02	Dec04	Dec05	Dec06	Dec07	Dec08	Dec09	Dec10	Dec11	Dec12
ROC %	Get a 7-Day Free Trial					-159.92	-128.62	-150.68	-168.40	-115.12

Lombard Medical Technologies ROC % Calculation

Lombard Medical Technologies's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2012 is calculated as:

	ROC % (A: Dec. 2012 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2011 )	+	Invested Capital (A: Dec. 2012 ))	/ count )
=	-8.244 * ( 1 - 4.05% )	/	( (6.012	+	6.871)	/ 2 )
=	-7.910118	/	6.4415
=	-122.80 %

where

	Invested Capital		(A: Dec. 2011 )
=	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	))
=	15.305	-	1.773	-	( 7.52	-	max(0, 2.962	-	12.432	+	7.52	))
=	6.012

	Invested Capital		(A: Dec. 2012 )
=	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	))
=	9.241	-	1.041	-	( 2.748	-	max(0, 5.086	-	6.415	+	2.748	))
=	6.871

Lombard Medical Technologies's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2012 is calculated as:

	ROC % (Q: Dec. 2012 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2011 )	+	Invested Capital (Q: Dec. 2012 ))	/ count )
=	-8.244 * ( 1 - 4.05% )	/	( (6.012	+	6.871)	/ 2 )
=	-7.910118	/	6.4415
=	-122.80 %

where

	Invested Capital		(Q: Dec. 2011 )
=	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	))
=	15.305	-	1.773	-	( 7.52	-	max(0, 2.962	-	12.432	+	7.52	))
=	6.012

	Invested Capital		(Q: Dec. 2012 )
=	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	))
=	9.241	-	1.041	-	( 2.748	-	max(0, 5.086	-	6.415	+	2.748	))
=	6.871

Note: The Operating Income data used here is one times the annual (Dec. 2012) data.

Lombard Medical Technologies (LSE:LMT) 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, Lombard Medical Technologies's WACC % is 0.00%. Lombard Medical Technologies's ROC % is -64.66% (calculated using TTM income statement data). Lombard Medical Technologies 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.

Lombard Medical Technologies ROC % Related Terms

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Lombard Medical Technologies (LSE:LMT) Business Description

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Website

http://www.lombardmedical.com

Lombard Medical Technologies PLC is engaged in the design and development of endovascular stent grafts, their manufacture, and commercialization either directly through the group's own sales force or through a network of local distributors supported by clinical specialists from Lombard Medical. The principal product, the AorfixT AAA stent graft has European CE mark approval for use in patients with high-angle-neck aneurysms of up to 90 degrees. The group has operations in United Kingdom and United States of America.