Returns Are Gaining Momentum At Hyunwoo Industrial (KOSDAQ:092300)

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. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, 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. With that in mind, we've noticed some promising trends at Hyunwoo Industrial (KOSDAQ:092300) so let's look a bit deeper.

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

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Hyunwoo Industrial:

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

0.045 = ₩5.1b ÷ (₩191b - ₩76b) (Based on the trailing twelve months to June 2025).

So, Hyunwoo Industrial has an ROCE of 4.5%. In absolute terms, that's a low return and it also under-performs the Electronic industry average of 6.4%.

View our latest analysis for Hyunwoo Industrial

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

What Does the ROCE Trend For Hyunwoo Industrial Tell Us?

While there are companies with higher returns on capital out there, we still find the trend at Hyunwoo Industrial promising. Looking at the data, we can see that even though capital employed in the business has remained relatively flat, the ROCE generated has risen by 686% over the last five years. So it's likely that the business is now reaping the full benefits of its past investments, since the capital employed hasn't changed considerably. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward.

The Bottom Line

In summary, we're delighted to see that Hyunwoo Industrial has been able to increase efficiencies and earn higher rates of return on the same amount of capital. Considering the stock has delivered 22% to its stockholders over the last five years, it may be fair to think that investors aren't fully aware of the promising trends yet. Given that, we'd look further into this stock in case it has more traits that could make it multiply in the long term.

Like most companies, Hyunwoo Industrial does come with some risks, and we've found 4 warning signs that you should be aware of.

While Hyunwoo Industrial isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

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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.