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# Is ANY Security Printing Company Public Limited Company’s (BUSE:ANY) 22% ROCE Any Good?

Today we are going to look at ANY Security Printing Company Public Limited Company (BUSE:ANY) to see whether it might be an attractive investment prospect. Specifically, we’re going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.

First, we’ll go over how we calculate ROCE. Next, we’ll compare it to others in its industry. Then we’ll determine how its current liabilities are affecting its ROCE.

### Understanding Return On Capital Employed (ROCE)

ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. All else being equal, a better business will have a higher ROCE. In brief, it is a useful tool, but it is not without drawbacks. Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since ‘No two businesses are exactly alike.’

### So, How Do We Calculate ROCE?

Analysts use this formula to calculate return on capital employed:

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

Or for ANY Security Printing:

0.22 = Ft2.0b ÷ (Ft18b – Ft9.4b) (Based on the trailing twelve months to September 2018.)

So, ANY Security Printing has an ROCE of 22%.

### Does ANY Security Printing Have A Good ROCE?

ROCE is commonly used for comparing the performance of similar businesses. Using our data, we find that ANY Security Printing’s ROCE is meaningfully better than the 10% average in the Commercial Services industry. I think that’s good to see, since it implies the company is better than other companies at making the most of its capital. Setting aside the comparison to its industry for a moment, ANY Security Printing’s ROCE in absolute terms currently looks quite high.

When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. ROCE is only a point-in-time measure. What happens in the future is pretty important for investors, so we have prepared a free report on analyst forecasts for ANY Security Printing.

### ANY Security Printing’s Current Liabilities And Their Impact On Its ROCE

Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE. To counter this, investors can check if a company has high current liabilities relative to total assets.

ANY Security Printing has total liabilities of Ft9.4b and total assets of Ft18b. Therefore its current liabilities are equivalent to approximately 51% of its total assets. ANY Security Printing boasts an attractive ROCE, even after considering the boost from high current liabilities.

### Our Take On ANY Security Printing’s ROCE

So we would be interested in doing more research here — there may be an opportunity! Of course you might be able to find a better stock than ANY Security Printing. So you may wish to see this free collection of other companies that have grown earnings strongly.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.