If we want to find a potential multi-bar, there are often underlying trends that can provide clues. A common approach is to try to find a business with yields on the employee capital (ROCE) that increases, jointly with growth Rising of the employee capital. Basically, this means that a company has profitable initiatives in which it can continue to reinvest, which is a trait of a composing machine. Speaking of this, we have noticed major changes in Baker Technology’s (SGX: BTP) Return to capital, so take a look.
For those who do not know, Roce is a measure of the annual profit before a company’s tax (its return), compared to the capital employee in the company. The formula of this calculation on Baker technology is:
Back to the capital employee = profit before interest and taxes (EBIT) ÷ (total assets – current liabilities)
0.049 = S $ 13 million ÷ (S 293 million $ – S $ 23 million) (Based on twelve months to December 2024).
So, Baker Technology has a rocker of 4.9%. In itself, it is a low return on capital, but it complies with the average yields of the industry of 4.9%.
See our latest analysis for Baker technology
Historical performances are an excellent starting point when looking for a stock so you can see the Baker Technology Roce gauge against its previous yields. If you want to immerse yourself in historical income, consult these free Graphics detailing income and performance of baker technology cash flows.
The shareholders will be relieved that Baker technology has turned into profitability. The company generated losses five years ago, but managed to overthrow it and, as we saw earlier, now earns 4.9%, which is still encouraging. Although the yields increased, the amount of capital used by Baker technology remained stable during the period. Without a significant increase in the employee capital, it is worth knowing what the company plans to do in the future with regard to the reinvestment and growth of the company. So if you are looking for high growth, you will want to see the capital of a company also employed.
To collect everything, Baker Technology has done well to increase the yields it generates from its employee capital. And a remarkable total return of 200% in the past five years tells us that investors expect more good things to happen in the future. In light of this, we think it is worth looking further in this stock, because if Baker technology can maintain these trends, it could have a brilliant future to come.