If you want to identify your next multibagger, there are some important trends to look out for. First, you want to identify what is growing. return In addition to capital employed (ROCE) continues to increase base of capital employed. This basically means that the company has a profitable endeavor that can be continuously reinvested, which is the nature of compound interest. Speaking of which, I noticed some big changes. Powermatic Data Systems Let's take a look at (SGX:BCY)'s return on equity.
What is return on capital employed (ROCE)?
For those who aren't sure what ROCE is, it measures the amount of pre-tax profit a company can generate from the capital employed in its business. To calculate this metric for Powermatic Data Systems, use the following formula:
Return on Capital Employed = Earnings before interest and tax (EBIT) ÷ (Total assets – Current liabilities)
0.17 = S$13 million ÷ (S$86 million – S$9.1 million) (Based on the previous 12 months to September 2023).
So, Powermatic Data Systems has an ROCE of 17%. While this is a standard return in itself, it is much better than the 5.7% generated by the telecom industry.
Check out our latest analysis for Powermatic Data Systems.
Although the past does not represent the future, it can be helpful to know how a company has performed historically. That's why I created this graph above. If you would like to see how Powermatic Data Systems has performed in the past on other metrics, you can view this. free A graph of Powermatic Data Systems' historical earnings, revenue and cash flow.
So, how is Powermatic Data Systems' ROCE trending?
The trends we've noticed at Powermatic Data Systems are very encouraging. Over the past five years, return on capital employed has increased significantly to 17%. Essentially, the business is earning more money per dollar of invested capital, and on top of that, it's now using 38% more capital. So we're very inspired by what we're seeing at Powermatic Data Systems because of the ability to profitably reinvest capital.
conclusion
Overall, it's great to see Powermatic Data Systems growing its capital base by benefiting from previous investments. The impressive total return of 131% over the past five years shows that investors expect even better things to happen in the future. With that in mind, we think the stock is worth further consideration, as it could have a bright future ahead if Powermatic Data Systems can maintain these trends.
Like most businesses, Powermatic Data Systems is subject to several risks. two warning signs What you need to know.
Powermatic Data Systems may not be the most profitable company right now, but we've compiled a list of companies that are currently generating a return on equity of 25% or higher.check this out free I'll list them here.
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