Returns On Capital At Captii (SGX:AWV) Paint A Concerning Picture

What financial metrics can indicate to us that a company is maturing or even in decline? Businesses in decline often have two underlying trends, firstly, a declining return on capital employed (ROCE) and a declining base of capital employed. This reveals that the company isn't compounding shareholder wealth because returns are falling and its net asset base is shrinking. So after we looked into Captii (SGX:AWV), the trends above didn't look too great.

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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. Analysts use this formula to calculate it for Captii:

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

0.014 = S$502k ÷ (S$38m - S$2.8m) (Based on the trailing twelve months to September 2025).

Therefore, Captii has an ROCE of 1.4%. Ultimately, that's a low return and it under-performs the Communications industry average of 6.8%.

View our latest analysis for Captii

Historical performance is a great place to start when researching a stock so above you can see the gauge for Captii's ROCE against it's prior returns. If you'd like to look at how Captii has performed in the past in other metrics, you can view this free graph of Captii's past earnings, revenue and cash flow.

What Does the ROCE Trend For Captii Tell Us?

The trend of ROCE at Captii is showing some signs of weakness. Unfortunately, returns have declined substantially over the last five years to the 1.4% we see today. In addition to that, Captii is now employing 21% less capital than it was five years ago. The combination of lower ROCE and less capital employed can indicate that a business is likely to be facing some competitive headwinds or seeing an erosion to its moat. If these underlying trends continue, we wouldn't be too optimistic going forward.

In Conclusion...

To see Captii reducing the capital employed in the business in tandem with diminishing returns, is concerning. And long term shareholders have watched their investments stay flat over the last five years. Unless there is a shift to a more positive trajectory in these metrics, we would look elsewhere.

Captii does have some risks though, and we've spotted 3 warning signs for Captii that you might be interested in.

While Captii may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list 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.