Looking Into Concrete Pumping Holdings's Return On Capital Employed - Concrete Pumping Holdings (NASDAQ:B
According to Benzinga Pro data Concrete Pumping Holdings BBCP posted a 13.7% decrease in earnings from Q1. Sales, however, increased by 15.19% over the previous quarter to $107.79 million. Despite the increase in sales this quarter, the decrease in earnings may suggest Concrete Pumping Holdings is not utilizing their capital as effectively as possible. In Q1, Concrete Pumping Holdings earned $6.47 million, and total sales reached $93.58 million.
What Is Return On Capital Employed?
Earnings data without context is not clear and can be difficult to base trading decisions on. Return on Capital Employed (ROCE) helps to filter signal from noise by measuring yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q2, Concrete Pumping Holdings posted an ROCE of 0.02%.
It is important to keep in mind that ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but does not account for factors that could affect earnings and sales in the near future.