U.S. markets open in 8 hours 34 minutes
  • S&P Futures

    3,653.00
    +29.75 (+0.82%)
     
  • Dow Futures

    29,857.00
    +228.00 (+0.77%)
     
  • Nasdaq Futures

    12,378.00
    +101.00 (+0.82%)
     
  • Russell 2000 Futures

    1,841.00
    +20.90 (+1.15%)
     
  • Crude Oil

    45.12
    -0.22 (-0.49%)
     
  • Gold

    1,788.10
    +7.20 (+0.40%)
     
  • Silver

    22.93
    +0.34 (+1.51%)
     
  • EUR/USD

    1.1960
    +0.0026 (+0.22%)
     
  • 10-Yr Bond

    0.8440
    0.0000 (0.00%)
     
  • Vix

    20.57
    -20.84 (-100.00%)
     
  • GBP/USD

    1.3365
    +0.0033 (+0.25%)
     
  • USD/JPY

    104.3910
    +0.0670 (+0.06%)
     
  • BTC-USD

    19,457.89
    -106.66 (-0.55%)
     
  • CMC Crypto 200

    382.39
    +17.79 (+4.88%)
     
  • FTSE 100

    6,266.19
    -101.39 (-1.59%)
     
  • Nikkei 225

    26,785.52
    +351.90 (+1.33%)
     

Looking Into WD-40's Return On Capital Employed

Benzinga Insights
·1 min read

Looking at Q4, WD-40 (NASDAQ: WDFC) earned $24.52 million, a 23.76% increase from the preceding quarter. WD-40 also posted a total of $111.65 million in sales, a 13.64% increase since Q3. In Q3, WD-40 earned $19.81 million, whereas sales reached $98.25 million.

Why ROCE Is Significant

Return on Capital Employed is a measure of yearly pre-tax profit relative to capital employed by a business. Changes in earnings and sales indicate shifts in a company's ROCE. A higher ROCE is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROCE suggests the opposite. In Q4, WD-40 posted an ROCE of 0.15%.

Keep in mind, while ROCE is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

View more earnings on WDFC

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 WD-40's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Q4 Earnings Insight

WD-40 reported Q4 earnings per share at $1.42/share, which beat analyst predictions of $1.13/share.

See more from Benzinga

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.