WeCommerce Holdings (TSXV:WE) ROC % : -1.65% (As of Dec. 2022)

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What is WeCommerce Holdings 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 %. WeCommerce Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2022 was -1.65%.

As of today (2024-06-04), WeCommerce Holdings's WACC % is 0.00%. WeCommerce Holdings's ROC % is 0.00% (calculated using TTM income statement data). WeCommerce Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

WeCommerce Holdings ROC % Historical Data

The historical data trend for WeCommerce Holdings'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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WeCommerce Holdings ROC % Chart

WeCommerce Holdings Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

ROC %

8.06

-7.73

-0.67

-4.32

WeCommerce Holdings Quarterly Data
	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22
ROC %	Get a 7-Day Free Trial									-1.54	-2.55	-6.84	-5.21	-1.65

WeCommerce Holdings ROC % Calculation

WeCommerce Holdings'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 )
=	-7.454 * ( 1 - 0.87% )	/	( (174.412	+	167.486)	/ 2 )
=	-7.3891502	/	170.949
=	-4.32 %

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	))
=	199.523	-	24.811	-	( 26.122	-	max(0, 30.919	-	31.219	+	26.122	))
=	174.412

	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	))
=	171.72	-	5.75	-	( 10.947	-	max(0, 15.85	-	14.334	+	10.947	))
=	167.486

WeCommerce Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2022 is calculated as:

	ROC % (Q: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2022 )	+	Invested Capital (Q: Dec. 2022 ))	/ count )
=	-2.916 * ( 1 - 0.17% )	/	( (185.796	+	167.486)	/ 2 )
=	-2.9110428	/	176.641
=	-1.65 %

where

	Invested Capital		(Q: Sep. 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	))
=	189.729	-	5.213	-	( 10.505	-	max(0, 16.306	-	15.026	+	10.505	))
=	185.796

	Invested Capital		(Q: 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	))
=	171.72	-	5.75	-	( 10.947	-	max(0, 15.85	-	14.334	+	10.947	))
=	167.486

Note: The Operating Income data used here is four times the quarterly (Dec. 2022) data.

WeCommerce Holdings (TSXV:WE) 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, WeCommerce Holdings's WACC % is 0.00%. WeCommerce Holdings's ROC % is 0.00% (calculated using TTM income statement data). WeCommerce Holdings 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.

WeCommerce Holdings ROC % Related Terms

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WeCommerce Holdings (TSXV:WE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » WeCommerce Holdings Ltd (TSXV:WE) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

329 Howe Street, PMB 2066, Victoria, BC, CAN, V6C 3N2

Website

https://www.wecommerce.co

WeCommerce Holdings Ltd is a holding company that owns a family of companies and brands in the Shopify partner ecosystem, including Pixel Union, Out of the Sandbox, Yopify, SuppleApps, Rehash, Stamped and Foursixty. The company's primary focus is to build, grow and acquire businesses that serve the Shopify Partner ecosystem. These businesses consist largely of Software as a Service, Digital Goods and Services businesses. Generally, these businesses build Apps and Themes and run Agencies that support Shopify merchants. The company targets businesses within the Shopify ecosystem due to its confidence in the Shopify platform, the fragmented nature of the ecosystem and the attractive economics that the businesses generally exhibit. Its segments include Themes, Apps and Agency.

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