FMP
Feb 16, 2025(Last modified: Feb 17, 2025)
The Marygold Companies, Inc. (NYSE:MGLD) operates in various sectors, providing a range of services and products. It competes with other firms in its industry, making financial efficiency a crucial aspect of its operations. Analyzing MGLD's Return on Invested Capital (ROIC) against its Weighted Average Cost of Capital (WACC) offers insights into how well the company utilizes its capital compared to its peers.
MGLD's ROIC is -21.40%, which is significantly lower than its WACC of 7.55%. This negative ROIC indicates that the company is not generating returns above its cost of capital, a concerning sign for investors. The ROIC to WACC ratio of -2.83 further highlights inefficiencies in capital utilization, suggesting that MGLD is not using its invested capital effectively to generate profits.
In comparison, Direct Digital Holdings, Inc. (DRCT) has an even lower ROIC of -52.92% and a higher WACC of 14.33%, resulting in a ROIC to WACC ratio of -3.69. This suggests that DRCT is also struggling with capital efficiency. On the other hand, NeuroSense Therapeutics Ltd. (NRSN) stands out with a remarkable ROIC of 406.38% and a WACC of 13.19%, leading to a ROIC to WACC ratio of 30.80. This indicates that NRSN is highly efficient in utilizing its capital to generate returns.
Kidpik Corp. (PIK) and AgriFORCE Growing Systems Ltd. (AGRI) also show negative ROICs of -0.14% and -192.54%, respectively, with WACCs of 14.19% and 123.85%. Their ROIC to WACC ratios of -0.01 and -1.55 reflect inefficiencies similar to MGLD. However, Hour Loop, Inc. (HOUR) presents a positive scenario with a ROIC of 15.81% and a WACC of 9.02%, resulting in a ROIC to WACC ratio of 1.75, indicating better capital utilization.
Among these companies, NeuroSense Therapeutics Ltd. (NRSN) is the most efficient in capital utilization, with a high ROIC to WACC ratio of 30.80. This suggests that NRSN is generating substantial returns on its invested capital relative to its cost of capital, making it an attractive option for investors seeking strong capital efficiency.
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