Lophos Holdings (XCNQ:MESC) ROC % : -27.12% (As of Sep. 2023)

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What is Lophos 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 %. Lophos Holdings's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was -27.12%.

As of today (2024-06-26), Lophos Holdings's WACC % is 9.50%. Lophos Holdings's ROC % is -28.69% (calculated using TTM income statement data). Lophos Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Lophos Holdings ROC % Historical Data

The historical data trend for Lophos 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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Lophos Holdings ROC % Chart

Lophos Holdings Annual Data

Trend

Mar22

Mar23

ROC %

-23.65

Lophos Holdings Quarterly Data
	Dec21	Mar22	Sep22	Dec22	Mar23	Jun23	Sep23
ROC %	Get a 7-Day Free Trial			-17.96	-20.64	-28.74	-38.05	-27.12

Lophos Holdings ROC % Calculation

Lophos Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	-0.817 * ( 1 - 0% )	/	( (3.461	+	3.449)	/ 2 )
=	-0.817	/	3.455
=	-23.65 %

where

	Invested Capital		(A: Mar. 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	))
=	4.564	-	0.348	-	( 1.001	-	max(0, 0.348	-	1.103	+	1.001	))
=	3.461

	Invested Capital		(A: Mar. 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	))
=	3.98	-	0.467	-	( 0.14	-	max(0, 0.467	-	0.531	+	0.14	))
=	3.449

Lophos Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	-1.012 * ( 1 - 0% )	/	( (3.762	+	3.7)	/ 2 )
=	-1.012	/	3.731
=	-27.12 %

where

	Invested Capital		(Q: Jun. 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	))
=	4.162	-	0.568	-	( 0.27	-	max(0, 0.623	-	0.455	+	0.27	))
=	3.762

	Invested Capital		(Q: Sep. 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	))
=	4.475	-	0.575	-	( 0.576	-	max(0, 0.575	-	0.775	+	0.576	))
=	3.7

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) data.

Lophos Holdings (XCNQ:MESC) 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, Lophos Holdings's WACC % is 9.50%. Lophos Holdings's ROC % is -28.69% (calculated using TTM income statement data). Lophos 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.

Lophos Holdings ROC % Related Terms

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Lophos Holdings (XCNQ:MESC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Lophos Holdings Inc (XCNQ:MESC) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

1111 Melville Street, Suite 620, Vancouver, BC, CAN, V6E 3V6

Website

Lophos Holdings Inc is engaged in the y is the cultivation of peyote and the manufacture of Lophophora compounds, including Mescaline, as well as formulation of novel Lophophora-based compounds.

Executives

John Ioannis Karagiannidis

Director

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