01Cyberaton Proenergy (WSE:01C) Shareholders Will Want The ROCE Trajectory To Continue

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So on that note, 01Cyberaton Proenergy (WSE:01C) looks quite promising in regards to its trends of return on capital.

What Is Return On Capital Employed (ROCE)?

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. To calculate this metric for 01Cyberaton Proenergy, this is the formula:

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

0.025 = zł3.2m ÷ (zł142m - zł9.4m) (Based on the trailing twelve months to June 2022).

So, 01Cyberaton Proenergy has an ROCE of 2.5%. Ultimately, that's a low return and it under-performs the Renewable Energy industry average of 6.6%.

Check out our latest analysis for 01Cyberaton Proenergy

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you're interested in investigating 01Cyberaton Proenergy's past further, check out this free graph of past earnings, revenue and cash flow.

What Does the ROCE Trend For 01Cyberaton Proenergy Tell Us?

Even though ROCE is still low in absolute terms, it's good to see it's heading in the right direction. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 2.5%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 142%. So we're very much inspired by what we're seeing at 01Cyberaton Proenergy thanks to its ability to profitably reinvest capital.

What We Can Learn From 01Cyberaton Proenergy's ROCE

All in all, it's terrific to see that 01Cyberaton Proenergy is reaping the rewards from prior investments and is growing its capital base. And a remarkable 199% total return over the last five years tells us that investors are expecting more good things to come in the future. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist.

If you want to continue researching 01Cyberaton Proenergy, you might be interested to know about the 3 warning signs that our analysis has discovered.

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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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.