We Like Coraza Integrated Technology Berhad's (KLSE:CORAZA) Returns And Here's How They're Trending

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. With that in mind, the ROCE of Coraza Integrated Technology Berhad (KLSE:CORAZA) looks great, so lets see what the trend can tell us.

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 Coraza Integrated Technology Berhad:

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

0.22 = RM21m ÷ (RM135m - RM39m) (Based on the trailing twelve months to September 2022).

Therefore, Coraza Integrated Technology Berhad has an ROCE of 22%. In absolute terms that's a great return and it's even better than the Metals and Mining industry average of 11%.

Check out our latest analysis for Coraza Integrated Technology Berhad

Above you can see how the current ROCE for Coraza Integrated Technology Berhad 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 Coraza Integrated Technology Berhad.

So How Is Coraza Integrated Technology Berhad's ROCE Trending?

The trends we've noticed at Coraza Integrated Technology Berhad are quite reassuring. The numbers show that in the last three years, the returns generated on capital employed have grown considerably to 22%. The amount of capital employed has increased too, by 141%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.

The Bottom Line

A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Coraza Integrated Technology Berhad has. Since the stock has returned a solid 39% to shareholders over the last year, it's fair to say investors are beginning to recognize these changes. In light of that, we think it's worth looking further into this stock because if Coraza Integrated Technology Berhad can keep these trends up, it could have a bright future ahead.

Coraza Integrated Technology Berhad does have some risks, we noticed 2 warning signs (and 1 which is potentially serious) we think you should know about.

If you'd like to see other companies earning high returns, check out our free list of companies earning high returns with solid balance sheets here.

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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.