Looking Into E W Scripps's Return On Capital Employed
E W Scripps (NASDAQ: SSP) posted Q2 earnings of $2.05 million, an increase from Q1 of 89.74%. Sales dropped to $358.88 million, a 16.71% decrease between quarters. E W Scripps earned $20.00 million, and sales totaled $430.91 million in Q1.
Why ROCE Is Significant
Changes in earnings and sales indicate shifts in E W Scripps’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q2, E W Scripps posted an ROCE of 0.0%.
It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.
Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.
In E W Scripps's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.
Q2 Earnings Recap
E W Scripps reported Q2 earnings per share at $-0.22/share, which beat analyst predictions of $-0.36/share.
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