![]() Investors may wish to consider higher-performing investments.īaguio Green Group’s Current Liabilities And Their Impact On Its ROCEĬurrent liabilities are short term bills and invoices that need to be paid in 12 months or less. Setting aside the industry comparison for now, Baguio Green Group’s ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. It appears that Baguio Green Group’s ROCE is fairly close to the Commercial Services industry average of 11%. ROCE is commonly used for comparing the performance of similar businesses. See our latest analysis for Baguio Green Group Is Baguio Green Group’s ROCE Good? Therefore, Baguio Green Group has an ROCE of 9.6%. Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)Ġ.096 = HK$30m ÷ (HK$603m – HK$328m) (Based on the trailing twelve months to June 2018.) Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since ‘No two businesses are exactly alike.’ How Do You Calculate Return On Capital Employed?Īnalysts use this formula to calculate return on capital employed: In brief, it is a useful tool, but it is not without drawbacks. ![]() In general, businesses with a higher ROCE are usually better quality. ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business. ![]() What is Return On Capital Employed (ROCE)? And finally, we’ll look at how its current liabilities are impacting its ROCE. Second, we’ll look at its ROCE compared to similar companies. In particular, we’ll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business.įirst up, we’ll look at what ROCE is and how we calculate it. Today we’ll evaluate Baguio Green Group Limited ( HKG:1397) to determine whether it could have potential as an investment idea. ![]() Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card! ![]()
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