Allpark Empreendimentos Participações e Serviços (BVMF:ALPK3) Shareholders Will Want The ROCE Trajectory To Continue

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So when we looked at Allpark Empreendimentos Participações e Serviços (BVMF:ALPK3) and its trend of ROCE, we really liked what we saw.

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Return On Capital Employed (ROCE): What Is It?

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for Allpark Empreendimentos Participações e Serviços:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.18 = R$343m ÷ (R$2.6b - R$671m) (Based on the trailing twelve months to September 2025).

So, Allpark Empreendimentos Participações e Serviços has an ROCE of 18%. In absolute terms, that's a satisfactory return, but compared to the Commercial Services industry average of 11% it's much better.

View our latest analysis for Allpark Empreendimentos Participações e Serviços

Historical performance is a great place to start when researching a stock so above you can see the gauge for Allpark Empreendimentos Participações e Serviços' ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Allpark Empreendimentos Participações e Serviços.

What Does the ROCE Trend For Allpark Empreendimentos Participações e Serviços Tell Us?

We're pretty happy with how the ROCE has been trending at Allpark Empreendimentos Participações e Serviços. The data shows that returns on capital have increased by 486% over the trailing five years. The company is now earning R$0.2 per dollar of capital employed. In regards to capital employed, Allpark Empreendimentos Participações e Serviços appears to been achieving more with less, since the business is using 26% less capital to run its operation. If this trend continues, the business might be getting more efficient but it's shrinking in terms of total assets.

The Bottom Line

From what we've seen above, Allpark Empreendimentos Participações e Serviços has managed to increase it's returns on capital all the while reducing it's capital base. Astute investors may have an opportunity here because the stock has declined 47% in the last five years. So researching this company further and determining whether or not these trends will continue seems justified.

On a final note, we found 3 warning signs for Allpark Empreendimentos Participações e Serviços (1 shouldn't be ignored) you should be aware of.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.