Latest news with #financialmetrics
Yahoo
a day ago
- Business
- Yahoo
Returns On Capital Signal Difficult Times Ahead For Singapore Telecommunications (SGX:Z74)
To avoid investing in a business that's in decline, there's a few financial metrics that can provide early indications of aging. More often than not, we'll see a declining return on capital employed (ROCE) and a declining amount of capital employed. This indicates the company is producing less profit from its investments and its total assets are decreasing. Having said that, after a brief look, Singapore Telecommunications (SGX:Z74) we aren't filled with optimism, but let's investigate further. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Return On Capital Employed (ROCE): What Is It? 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 Singapore Telecommunications: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.036 = S$1.4b ÷ (S$47b - S$8.4b) (Based on the trailing twelve months to March 2025). Thus, Singapore Telecommunications has an ROCE of 3.6%. Ultimately, that's a low return and it under-performs the Telecom industry average of 11%. See our latest analysis for Singapore Telecommunications Above you can see how the current ROCE for Singapore Telecommunications compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Singapore Telecommunications for free. What Does the ROCE Trend For Singapore Telecommunications Tell Us? We are a bit worried about the trend of returns on capital at Singapore Telecommunications. About five years ago, returns on capital were 5.1%, however they're now substantially lower than that as we saw above. Meanwhile, capital employed in the business has stayed roughly the flat over the period. Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition. So because these trends aren't typically conducive to creating a multi-bagger, we wouldn't hold our breath on Singapore Telecommunications becoming one if things continue as they have. Our Take On Singapore Telecommunications' ROCE In summary, it's unfortunate that Singapore Telecommunications is generating lower returns from the same amount of capital. Since the stock has skyrocketed 108% over the last five years, it looks like investors have high expectations of the stock. In any case, the current underlying trends don't bode well for long term performance so unless they reverse, we'd start looking elsewhere. On a final note, we found 3 warning signs for Singapore Telecommunications (1 makes us a bit uncomfortable) you should be aware of. 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. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
2 days ago
- Business
- Yahoo
Investors Could Be Concerned With SNS Network Technology Berhad's (KLSE:SNS) Returns On Capital
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. In light of that, when we looked at SNS Network Technology Berhad (KLSE:SNS) and its ROCE trend, we weren't exactly thrilled. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Return On Capital Employed (ROCE): What Is It? 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 SNS Network Technology Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.16 = RM54m ÷ (RM869m - RM542m) (Based on the trailing twelve months to April 2025). Therefore, SNS Network Technology Berhad has an ROCE of 16%. On its own, that's a standard return, however it's much better than the 10% generated by the Electronic industry. See our latest analysis for SNS Network Technology Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for SNS Network Technology Berhad's ROCE against it's prior returns. If you're interested in investigating SNS Network Technology Berhad's past further, check out this free graph covering SNS Network Technology Berhad's past earnings, revenue and cash flow. So How Is SNS Network Technology Berhad's ROCE Trending? In terms of SNS Network Technology Berhad's historical ROCE movements, the trend isn't fantastic. Around five years ago the returns on capital were 22%, but since then they've fallen to 16%. Although, given both revenue and the amount of assets employed in the business have increased, it could suggest the company is investing in growth, and the extra capital has led to a short-term reduction in ROCE. If these investments prove successful, this can bode very well for long term stock performance. On a separate but related note, it's important to know that SNS Network Technology Berhad has a current liabilities to total assets ratio of 62%, which we'd consider pretty high. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. Ideally we'd like to see this reduce as that would mean fewer obligations bearing risks. Our Take On SNS Network Technology Berhad's ROCE In summary, despite lower returns in the short term, we're encouraged to see that SNS Network Technology Berhad is reinvesting for growth and has higher sales as a result. And there could be an opportunity here if other metrics look good too, because the stock has declined 35% in the last year. As a result, we'd recommend researching this stock further to uncover what other fundamentals of the business can show us. If you want to continue researching SNS Network Technology Berhad, you might be interested to know about the 1 warning sign that our analysis has discovered. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Returns On Capital Signal Difficult Times Ahead For Singapore Telecommunications (SGX:Z74)
To avoid investing in a business that's in decline, there's a few financial metrics that can provide early indications of aging. More often than not, we'll see a declining return on capital employed (ROCE) and a declining amount of capital employed. This indicates the company is producing less profit from its investments and its total assets are decreasing. Having said that, after a brief look, Singapore Telecommunications (SGX:Z74) we aren't filled with optimism, but let's investigate further. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Return On Capital Employed (ROCE): What Is It? 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 Singapore Telecommunications: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.036 = S$1.4b ÷ (S$47b - S$8.4b) (Based on the trailing twelve months to March 2025). Thus, Singapore Telecommunications has an ROCE of 3.6%. Ultimately, that's a low return and it under-performs the Telecom industry average of 11%. See our latest analysis for Singapore Telecommunications Above you can see how the current ROCE for Singapore Telecommunications compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Singapore Telecommunications for free. What Does the ROCE Trend For Singapore Telecommunications Tell Us? We are a bit worried about the trend of returns on capital at Singapore Telecommunications. About five years ago, returns on capital were 5.1%, however they're now substantially lower than that as we saw above. Meanwhile, capital employed in the business has stayed roughly the flat over the period. Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition. So because these trends aren't typically conducive to creating a multi-bagger, we wouldn't hold our breath on Singapore Telecommunications becoming one if things continue as they have. Our Take On Singapore Telecommunications' ROCE In summary, it's unfortunate that Singapore Telecommunications is generating lower returns from the same amount of capital. Since the stock has skyrocketed 108% over the last five years, it looks like investors have high expectations of the stock. In any case, the current underlying trends don't bode well for long term performance so unless they reverse, we'd start looking elsewhere. On a final note, we found 3 warning signs for Singapore Telecommunications (1 makes us a bit uncomfortable) you should be aware of. 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. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
4 days ago
- Business
- Yahoo
UG Healthcare (Catalist:8K7) Is Reinvesting At Lower Rates Of Return
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. In light of that, when we looked at UG Healthcare (Catalist:8K7) and its ROCE trend, we weren't exactly thrilled. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Understanding 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. Analysts use this formula to calculate it for UG Healthcare: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.0019 = S$354k ÷ (S$232m - S$45m) (Based on the trailing twelve months to December 2024). Therefore, UG Healthcare has an ROCE of 0.2%. Ultimately, that's a low return and it under-performs the Medical Equipment industry average of 7.8%. See our latest analysis for UG Healthcare 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 UG Healthcare has performed in the past in other metrics, you can view this free graph of UG Healthcare's past earnings, revenue and cash flow. How Are Returns Trending? When we looked at the ROCE trend at UG Healthcare, we didn't gain much confidence. Around five years ago the returns on capital were 6.3%, but since then they've fallen to 0.2%. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. If these investments prove successful, this can bode very well for long term stock performance. On a side note, UG Healthcare has done well to pay down its current liabilities to 19% of total assets. That could partly explain why the ROCE has dropped. What's more, this can reduce some aspects of risk to the business because now the company's suppliers or short-term creditors are funding less of its operations. Some would claim this reduces the business' efficiency at generating ROCE since it is now funding more of the operations with its own money. Our Take On UG Healthcare's ROCE In summary, despite lower returns in the short term, we're encouraged to see that UG Healthcare is reinvesting for growth and has higher sales as a result. Despite these promising trends, the stock has collapsed 87% over the last five years, so there could be other factors hurting the company's prospects. Therefore, we'd suggest researching the stock further to uncover more about the business. Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 2 warning signs for UG Healthcare (of which 1 is a bit unpleasant!) that you should know about. While UG Healthcare 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. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
5 days ago
- Business
- Yahoo
Returns On Capital At Suria Capital Holdings Berhad (KLSE:SURIA) 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. Basically the company is earning less on its investments and it is also reducing its total assets. So after we looked into Suria Capital Holdings Berhad (KLSE:SURIA), the trends above didn't look too great. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. What Is Return On Capital Employed (ROCE)? 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 Suria Capital Holdings Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.025 = RM33m ÷ (RM1.4b - RM89m) (Based on the trailing twelve months to March 2025). So, Suria Capital Holdings Berhad has an ROCE of 2.5%. In absolute terms, that's a low return and it also under-performs the Infrastructure industry average of 6.5%. See our latest analysis for Suria Capital Holdings Berhad In the above chart we have measured Suria Capital Holdings Berhad's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free analyst report for Suria Capital Holdings Berhad . The Trend Of ROCE There is reason to be cautious about Suria Capital Holdings Berhad, given the returns are trending downwards. About five years ago, returns on capital were 4.0%, however they're now substantially lower than that as we saw above. Meanwhile, capital employed in the business has stayed roughly the flat over the period. Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition. If these trends continue, we wouldn't expect Suria Capital Holdings Berhad to turn into a multi-bagger. Our Take On Suria Capital Holdings Berhad's ROCE In summary, it's unfortunate that Suria Capital Holdings Berhad is generating lower returns from the same amount of capital. Yet despite these poor fundamentals, the stock has gained a huge 106% over the last five years, so investors appear very optimistic. Regardless, we don't feel too comfortable with the fundamentals so we'd be steering clear of this stock for now. Suria Capital Holdings Berhad could be trading at an attractive price in other respects, so you might find our on our platform quite valuable. While Suria Capital Holdings Berhad isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
