Groupe OKwind Société anonyme (EPA:ALOKW) Is Looking To Continue Growing Its Returns On Capital

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So on that note, Groupe OKwind Société anonyme (EPA:ALOKW) looks quite promising in regards to its trends of return on capital.

Understanding Return On Capital Employed (ROCE)

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. The formula for this calculation on Groupe OKwind Société anonyme is:

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

0.13 = €6.7m ÷ (€82m - €29m) (Based on the trailing twelve months to June 2024).

So, Groupe OKwind Société anonyme has an ROCE of 13%. That's a pretty standard return and it's in line with the industry average of 13%.

See our latest analysis for Groupe OKwind Société anonyme

In the above chart we have measured Groupe OKwind Société anonyme's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Groupe OKwind Société anonyme for free.

What The Trend Of ROCE Can Tell Us

Groupe OKwind Société anonyme is displaying some positive trends. The data shows that returns on capital have increased substantially over the last three years to 13%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 169%. So we're very much inspired by what we're seeing at Groupe OKwind Société anonyme thanks to its ability to profitably reinvest capital.

The Bottom Line

All in all, it's terrific to see that Groupe OKwind Société anonyme is reaping the rewards from prior investments and is growing its capital base. Although the company may be facing some issues elsewhere since the stock has plunged 76% in the last year. Still, it's worth doing some further research to see if the trends will continue into the future.

One final note, you should learn about the 3 warning signs we've spotted with Groupe OKwind Société anonyme (including 1 which is significant) .

For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high 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.