To find a multi-bagger stock, what are the underlying trends we should look for in a business? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Speaking of which, we noticed some great changes in Jiangsu Cnano Technology's (SHSE:688116) returns on capital, so let's have a look.
Understanding Return On Capital Employed (ROCE)
For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for Jiangsu Cnano Technology:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.14 = CN¥421m ÷ (CN¥3.7b - CN¥623m) (Based on the trailing twelve months to June 2022).
So, Jiangsu Cnano Technology has an ROCE of 14%. In absolute terms, that's a satisfactory return, but compared to the Chemicals industry average of 9.7% it's much better.
See our latest analysis for Jiangsu Cnano Technology
SHSE:688116 Return on Capital Employed September 27th 2022
In the above chart we have measured Jiangsu Cnano Technology's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Jiangsu Cnano Technology here for free.
What Can We Tell From Jiangsu Cnano Technology's ROCE Trend?
Jiangsu Cnano Technology is displaying some positive trends. The data shows that returns on capital have increased substantially over the last five years to 14%. 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 742%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.
On a related note, the company's ratio of current liabilities to total assets has decreased to 17%, which basically reduces it's funding from the likes of short-term creditors or suppliers. So this improvement in ROCE has come from the business' underlying economics, which is great to see.
The Bottom Line
To sum it up, Jiangsu Cnano Technology has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. And with the stock having performed exceptionally well over the last three years, these patterns are being accounted for by investors. 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.
One more thing to note, we've identified 1 warning sign with Jiangsu Cnano Technology and understanding this should be part of your investment process.
While Jiangsu Cnano Technology isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.
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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.
要找到一隻多袋股票,我們應該在一家企業中尋找什麼潛在趨勢?理想情況下,一家企業將呈現兩種趨勢;第一,增長退貨關於已使用資本(ROCE),第二,增加金額已動用資本的比例。歸根結底,這表明它是一家正在以越來越高的回報率對利潤進行再投資的企業。説到這裏,我們注意到了一些很大的變化江蘇中野科技(上海證券交易所:688116)資本回報率,讓我們來看看。
瞭解資本回報率(ROCE)
對於那些不確定ROCE是什麼的人,它衡量的是一家公司可以從其業務中使用的資本產生的税前利潤。分析師對江蘇中野科技的計算公式如下:
已動用資本回報率=息税前收益(EBIT)?(總資產-流動負債)
0.14=CN元4.21億?(CN元37億-CN元6.23億)(根據截至2022年6月的往績12個月計算).
所以,江蘇中野科技ROCE為14%。就絕對值而言,這是一個令人滿意的回報率,但與化工行業9.7%的平均回報率相比,這要好得多。
查看我們對江蘇中野科技的最新分析
上證綜指:2022年9月27日資本回報率688116
在上面的圖表中,我們比較了江蘇中諾科技之前的淨資產收益率和之前的表現,但可以説,未來更重要。如果你願意,你可以在這裏查看江蘇中野科技分析師的預測免費的。
從江蘇中諾科技的ROCE趨勢可以看出什麼?
江蘇中諾科技正呈現出一些積極的趨勢。數據顯示,過去五年,資本回報率大幅上升至14%。該公司實際上每使用一美元資本就能賺到更多的錢,值得注意的是,資本額也增加了742%。越來越多的資本帶來越來越多的回報,這在多頭投資者中很常見,這就是為什麼我們對此印象深刻。
另外,該公司的流動負債與總資產之比已降至17%,這基本上減少了該公司從短期債權人或供應商等方面獲得的資金。因此,ROCE的這種改善來自於企業的基礎經濟,這一點很好。
底線
總而言之,江蘇中野科技已經證明,它可以對業務進行再投資,並從投入的資本中產生更高的回報,這是非常棒的。隨着該股在過去三年中表現異常出色,這些模式得到了投資者的考慮。因此,鑑於該股已證明其趨勢看好,有必要對該公司進行進一步研究,看看這些趨勢是否可能持續下去。
還有一件事需要注意,我們已經確定了1個警告標誌與江蘇中諾科技合作,並理解這應該是您投資過程的一部分。
雖然江蘇中野科技並沒有獲得最高的回報,但看看這個免費資產負債表穩健、股本回報率高的公司名單。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。