Returns On Capital At DUKSAN TECHOPIALtd (KOSDAQ:317330) Paint An Interesting Picture

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. In light of that, when we looked at DUKSAN TECHOPIALtd (KOSDAQ:317330) and its ROCE trend, we weren't exactly thrilled.

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. The formula for this calculation on DUKSAN TECHOPIALtd is:

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

0.08 = ₩12b ÷ (₩164b - ₩8.7b) (Based on the trailing twelve months to June 2020).

So, DUKSAN TECHOPIALtd has an ROCE of 8.0%. In absolute terms, that's a low return but it's around the Semiconductor industry average of 9.0%.

View our latest analysis for DUKSAN TECHOPIALtd

Above you can see how the current ROCE for DUKSAN TECHOPIALtd compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free report for DUKSAN TECHOPIALtd.

What Does the ROCE Trend For DUKSAN TECHOPIALtd Tell Us?

There hasn't been much to report for DUKSAN TECHOPIALtd's returns and its level of capital employed because both metrics have been steady for the past . Businesses with these traits tend to be mature and steady operations because they're past the growth phase. With that in mind, unless investment picks up again in the future, we wouldn't expect DUKSAN TECHOPIALtd to be a multi-bagger going forward.

Our Take On DUKSAN TECHOPIALtd's ROCE

We can conclude that in regards to DUKSAN TECHOPIALtd's returns on capital employed and the trends, there isn't much change to report on. Additionally, the stock's total return to shareholders over the last year has been flat, which isn't too surprising. On the whole, we aren't too inspired by the underlying trends and we think there may be better chances of finding a multi-bagger elsewhere.

Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 2 warning signs for DUKSAN TECHOPIALtd (of which 1 makes us a bit uncomfortable!) that you should know about.

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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