Molycorp (XSWX:MCP) ROIC % : -11.32% (As of Jun. 2015)

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What is Molycorp ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Molycorp's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2015 was -11.32%.

As of today (2024-05-08), Molycorp's WACC % is 10.36%. Molycorp's ROIC % is -24.37% (calculated using TTM income statement data). Molycorp earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Molycorp ROIC % Historical Data

The historical data trend for Molycorp's ROIC % 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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Molycorp ROIC % Chart

Molycorp Annual Data

Trend

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

ROIC %

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-43.62

30.22

-26.81

-11.73

-18.82

Molycorp Quarterly Data
	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15
ROIC %	Get a 7-Day Free Trial															-7.05	-8.23	-48.88	-9.99	-11.32

Competitive Comparison of Molycorp's ROIC %

For the Other Industrial Metals & Mining subindustry, Molycorp's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Molycorp's ROIC % Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Molycorp's ROIC % distribution charts can be found below:

* The bar in red indicates where Molycorp's ROIC % falls into.

Molycorp ROIC % Calculation

Molycorp's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2014 is calculated as:

	ROIC % (A: Dec. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2013 )	+	Invested Capital (A: Dec. 2014 ))	/ count )
=	-439.734 * ( 1 - 3.65% )	/	( (2286.433	+	2215.387)	/ 2 )
=	-423.683709	/	2250.91
=	-18.82 %

where

	Invested Capital		(A: Dec. 2013 )
=	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	))
=	2685.976	-	118.764	-	( 280.779	-	max(0, 137.01	-	515.494	+	280.779	))
=	2286.433

	Invested Capital		(A: Dec. 2014 )
=	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	))
=	2512.359	-	90.516	-	( 206.456	-	max(0, 107.336	-	443.679	+	206.456	))
=	2215.387

Molycorp's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2015 is calculated as:

	ROIC % (Q: Jun. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2015 )	+	Invested Capital (Q: Jun. 2015 ))	/ count )
=	-242.38 * ( 1 - -1.01% )	/	( (2221.384	+	2104.195)	/ 2 )
=	-244.828038	/	2162.7895
=	-11.32 %

where

	Invested Capital		(Q: Mar. 2015 )
=	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	))
=	2444.389	-	92.105	-	( 130.9	-	max(0, 111.352	-	390.077	+	130.9	))
=	2221.384

	Invested Capital		(Q: Jun. 2015 )
=	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	))
=	2225.523	-	49.765	-	( 71.563	-	max(0, 70.76	-	312.405	+	71.563	))
=	2104.195

Note: The Operating Income data used here is four times the quarterly (Jun. 2015) data.

Molycorp (XSWX:MCP) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Molycorp's WACC % is 10.36%. Molycorp's ROIC % is -24.37% (calculated using TTM income statement data).

Be Aware

Like ROE % and ROA %, ROIC % 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.

Molycorp ROIC % Related Terms

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Molycorp (XSWX:MCP) Business Description

Industry

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Address

Website

http://www.molycorp.com

Molycorp Inc, formerly known as Rare Earth Acquisitions LLC, was formed on March 4, 2010 as a new Delaware corporation. The Company manufactures custom engineered rare earth and rare metal products. Its business is organized into four reportable segments: Resources; Chemicals and Oxides; Magnetic Materials and Alloys; and Rare Metals. The Resources segment includes its operations at the Molycorp Mountain Pass Rare Earth Facility, where it conducts rare earth minerals extraction to produce: rare earth concentrates; REO, including lanthanum, cerium, neodymium, praseodymium, and yttrium; heavy rare earth concentrates, which include samarium, europium, gadolinium, terbium, dysprosium, and others; and SorbXTM, a line of proprietary rare earth-based water treatment products. The Chemicals and Oxides segment includes: production of REO at its operations at Molycorp Silmet; separated heavy rare earth oxides and other custom engineered materials from its facilities in Jiangyin, Jiangsu Province, China; and production of REO, salts of rare earth elements, or REEs, zirconium-based engineered materials and mixed rare earth/zirconium oxides from its facilities in Zibo, Shandong Province, China. The Magnetic Materials and Alloys segment includes: the production of Neo Powders through its wholly-owned manufacturing facilities in Tianjin, China, and Korat, Thailand, under the Molycorp Magnequench brand. This operating segment also includes manufacturing of neodymium and samarium magnet alloys, other specialty alloy products and rare earth metals at its MMA facility, located in Tolleson, Arizona. The Rare Metals segment produces, reclaims, refines and markets high value niche metals and their compounds that include gallium, indium, rhenium, tantalum, and niobium. Applications from products made in this segment include wireless technologies, LED, flat panel display, turbine, solar, catalyst, steel additive, electronics applications, and others. The Company's operations are subject to numerous and detailed international, national, federal, state and local laws, regulations and permits affecting the mining and mineral processing industry, including those pertaining to employee health and safety, environmental permitting and licensing, air quality standards, greenhouse gas, or GHG, emissions, water usage and disposal, pollution, waste management, plant and wildlife protection, handling and disposal of radioactive substances, remediation of soil and groundwater contamination, land use, reclamation and restoration of properties, the discharge of materials into the environment and groundwater quality and availability.

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