S.C. Confectii Vaslui (BVB:COVB) Is Experiencing Growth In Returns On Capital

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? 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. So when we looked at S.C. Confectii Vaslui (BVB:COVB) and its trend of ROCE, we really liked what we saw.

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What Is Return On Capital Employed (ROCE)?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on S.C. Confectii Vaslui is:

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

0.16 = RON8.0m ÷ (RON52m - RON3.0m) (Based on the trailing twelve months to June 2025).

So, S.C. Confectii Vaslui has an ROCE of 16%. In absolute terms, that's a satisfactory return, but compared to the Luxury industry average of 8.3% it's much better.

See our latest analysis for S.C. Confectii Vaslui

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'd like to look at how S.C. Confectii Vaslui has performed in the past in other metrics, you can view this free graph of S.C. Confectii Vaslui's past earnings, revenue and cash flow.

The Trend Of ROCE

Investors would be pleased with what's happening at S.C. Confectii Vaslui. Over the last five years, returns on capital employed have risen substantially to 16%. The amount of capital employed has increased too, by 44%. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.

Our Take On S.C. Confectii Vaslui's ROCE

To sum it up, S.C. Confectii Vaslui has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. And investors seem to expect more of this going forward, since the stock has rewarded shareholders with a 22% return over the last year. Therefore, we think it would be worth your time to check if these trends are going to continue.

Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 4 warning signs for S.C. Confectii Vaslui (of which 3 make us uncomfortable!) that you should know about.

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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.