Investors Met With Slowing Returns on Capital At TASUKI Holdings (TSE:166A)

What are the early trends we should look for to identify a stock that could 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. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. In light of that, when we looked at TASUKI Holdings (TSE:166A) and its ROCE trend, we weren't exactly thrilled.

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Understanding Return On Capital Employed (ROCE)

For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for TASUKI Holdings:

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

0.094 = JP¥5.0b ÷ (JP¥75b - JP¥22b) (Based on the trailing twelve months to June 2025).

Therefore, TASUKI Holdings has an ROCE of 9.4%. In absolute terms, that's a low return, but it's much better than the Consumer Durables industry average of 7.0%.

Check out our latest analysis for TASUKI Holdings

Historical performance is a great place to start when researching a stock so above you can see the gauge for TASUKI Holdings' ROCE against it's prior returns. If you're interested in investigating TASUKI Holdings' past further, check out this free graph covering TASUKI Holdings' past earnings, revenue and cash flow.

So How Is TASUKI Holdings' ROCE Trending?

Over the past , TASUKI Holdings' ROCE and capital employed have both remained mostly flat. It's not uncommon to see this when looking at a mature and stable business that isn't re-investing its earnings because it has likely passed that phase of the business cycle. With that in mind, unless investment picks up again in the future, we wouldn't expect TASUKI Holdings to be a multi-bagger going forward.

What We Can Learn From TASUKI Holdings' ROCE

We can conclude that in regards to TASUKI Holdings' returns on capital employed and the trends, there isn't much change to report on. Since the stock has gained an impressive 42% over the last year, investors must think there's better things to come. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn't high.

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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.