What early trends should you look for to identify stocks with the potential to increase in value over the long term? One common approach is to look for companies that: Return value Capital employed increasing with growth (ROCE) amount of capital employed. If you see this, it usually means the company has a good business model and plenty of opportunities for profitable reinvestment. So, regarding that point, canon marketing japan (TSE:8060) looks very promising in terms of return on equity trends.
What is return on capital employed (ROCE)?
In case you aren't familiar, ROCE is a metric that measures how much pre-tax profit (as a percentage) a company earns on the capital invested in its business. At Canon Marketing Japan, analysts use the following formula to calculate:
Return on Capital Employed = Earnings before interest and tax (EBIT) ÷ (Total assets – Current liabilities)
0.12 = 52 billion yen ÷ (557 billion yen – 111 billion yen) (Based on the previous 12 months to December 2023).
So, Canon Marketing Japan's ROCE is 12%. In absolute terms, this is a satisfactory return, but compared to the electronics industry average of 9.7%, it's much better.
Check out Canon Marketing Japan's latest analysis.
Above you can see how Canon Marketing Japan's current ROCE compares to its previous return on equity, but history can only tell us so much. If you'd like, check out the forecasts from the analysts covering Canon Marketing Japan. free.
What is Canon Marketing Japan's ROCE?
Investors will be happy with what's happening at Canon Marketing Japan. According to the data, the return on capital has increased significantly to 12% in the past five years. It is worth noting that the company has virtually increased its return per dollar of capital employed, and the amount of capital has also increased by 21%. That's why we're so inspired by what we're seeing thanks to Canon Marketing Japan's profitable capital reinvestment capabilities.
Important points
Overall, it's great to see Canon Marketing Japan benefit from upfront investment and expand its capital base. And because stocks have performed so well over the past five years, investors are taking these patterns into account. So, given that this stock has proven to have an encouraging trend, it's worth investigating the company further to see if that trend is likely to persist.
Another thing we discovered 1 warning sign A matchup with Canon Marketing Japan could be interesting.
Canon Marketing Japan doesn't have the best profits, but check this out. free A list of companies with solid balance sheets and high return on equity.
Valuation is complex, but we help make it simple.
Check out our comprehensive analysis, including below, to see if Canon Marketing Japan is potentially overvalued or undervalued. Fair value estimates, risks and caveats, dividends, insider trading, and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
