Thinkific Labs (TSX:THNC) ROC % : -37.69% (As of Mar. 2024)

View and export this data going back to 2021. Start your Free Trial

What is Thinkific Labs 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 %. Thinkific Labs's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -37.69%.

As of today (2024-05-26), Thinkific Labs's WACC % is 13.44%. Thinkific Labs's ROC % is -47.22% (calculated using TTM income statement data). Thinkific Labs earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Thinkific Labs ROC % Historical Data

The historical data trend for Thinkific Labs'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.

* Premium members only.

Thinkific Labs ROC % Chart

Thinkific Labs Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

Get a 7-Day Free Trial

9.61

-28.17

-288.94

-262.04

-70.37

Thinkific Labs Quarterly Data
	Dec18	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial														-128.13	-93.25	-30.78	-29.78	-37.69

Thinkific Labs ROC % Calculation

Thinkific Labs's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-14.222 * ( 1 - 0% )	/	( (19.726	+	20.697)	/ 2 )
=	-14.222	/	20.2115
=	-70.37 %

where

	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	))
=	139.885	-	4.593	-	( 127.49	-	max(0, 18.489	-	134.055	+	127.49	))
=	19.726

	Invested Capital		(A: 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	))
=	131.202	-	3.498	-	( 116.197	-	max(0, 20.631	-	127.638	+	116.197	))
=	20.697

Thinkific Labs'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 )
=	-8.32 * ( 1 - 0% )	/	( (20.697	+	23.451)	/ 2 )
=	-8.32	/	22.074
=	-37.69 %

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	))
=	131.202	-	3.498	-	( 116.197	-	max(0, 20.631	-	127.638	+	116.197	))
=	20.697

	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	))
=	131.353	-	4.147	-	( 118.188	-	max(0, 24.175	-	127.93	+	118.188	))
=	23.451

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

Thinkific Labs (TSX:THNC) 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, Thinkific Labs's WACC % is 13.44%. Thinkific Labs's ROC % is -47.22% (calculated using TTM income statement data). Thinkific Labs 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.

Thinkific Labs ROC % Related Terms

Thank you for viewing the detailed overview of Thinkific Labs's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Thinkific Labs (TSX:THNC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Thinkific Labs Inc (TSX:THNC) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

THNCF:USA 5S0:Germany

Address

369 Terminal Ave, Suite 400, Vancouver, BC, CAN, V6A 4C4

Website

https://www.thinkific.com

Thinkific Labs Inc is a cloud-based software platform. The Company's primary business activity is to provide a platform that helps entrepreneurs and established businesses to scale and generate revenue by teaching what they know. The Company's platform provides its Creators with the functionality needed to launch, grow, and diversify their businesses by creating and selling learning products composed of customized courses, communities, membership sites, and other experiences that our Creators can create, sell and deliver using the Company's Platform.

Thinkific Labs (TSX:THNC) Headlines

No Headlines