Live Nation Entertainment (LTS:0JVD) ROC % : 9.59% (As of Jun. 2024)

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What is Live Nation Entertainment 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 %. Live Nation Entertainment's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 9.59%.

As of today (2024-11-13), Live Nation Entertainment's WACC % is 9.76%. Live Nation Entertainment's ROC % is 5.00% (calculated using TTM income statement data). Live Nation Entertainment earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Live Nation Entertainment ROC % Historical Data

The historical data trend for Live Nation Entertainment'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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Live Nation Entertainment ROC % Chart

Live Nation Entertainment Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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2.75

-18.31

-3.95

4.66

6.25

Live Nation Entertainment Quarterly Data
	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24
ROC %	Get a 7-Day Free Trial															9.43	16.58	-3.23	9.70	9.59

Live Nation Entertainment ROC % Calculation

Live Nation Entertainment'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 )
=	1052.576 * ( 1 - 17.91% )	/	( (12805.117	+	14845.543)	/ 2 )
=	864.0596384	/	13825.33
=	6.25 %

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	))
=	16460.841	-	3799.517	-	( 5606.457	-	max(0, 8303.315	-	8159.522	+	5606.457	))
=	12805.117

	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	))
=	19074.045	-	4610.651	-	( 6231.866	-	max(0, 9959.903	-	9577.754	+	6231.866	))
=	14845.543

Live Nation Entertainment's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2024 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	1860.16 * ( 1 - 17.56% )	/	( (16037.917	+	15930.821)	/ 2 )
=	1533.515904	/	15984.369
=	9.59 %

where

	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	))
=	20030.189	-	4892.902	-	( 6501.709	-	max(0, 11328.41	-	10427.78	+	6501.709	))
=	16037.917

	Invested Capital		(Q: Jun. 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	))
=	20453.984	-	5466.179	-	( 6398.722	-	max(0, 11627.149	-	10684.133	+	6398.722	))
=	15930.821

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

Live Nation Entertainment (LTS:0JVD) 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, Live Nation Entertainment's WACC % is 9.76%. Live Nation Entertainment's ROC % is 5.00% (calculated using TTM income statement data). Live Nation Entertainment 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.

Live Nation Entertainment ROC % Related Terms

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Live Nation Entertainment Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » Live Nation Entertainment Inc (LTS:0JVD) » Definitions » ROC %

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Address

9348 Civic Center Drive, Beverly Hills, CA, USA, 90210

Website

https://www.livenationentertainment.com

Live Nation is the largest live entertainment company in the world, serving as a concert promoter, venue operator, and ticketing platform. In addition, the firm generates revenue from sponsorships and advertising. With offices in 45 countries, Live Nation promotes concerts globally and it owns, operates, or had exclusive booking rights to 373 venues worldwide at the end of 2023, which the firm says makes it the second-largest operator of music venues globally. In 2023, Live Nation promoted more than 50,000 events, drawing more than 145 million fans. Ticketmaster is a dominant global ticketing service, selling more than 620 million tickets in 2023.

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