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ROCE Insights For Ford Motor

Benzinga Insights
·1 min read

Ford Motor (NYSE: F) showed a loss in earnings since Q2, totaling $2.35 billion. Sales, on the other hand, increased by 108.8% to $34.71 billion during Q3. Ford Motor collected $16.62 billion in revenue during Q2, but reported earnings showed a $2.76 billion loss.

What Is Return On Capital Employed?

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 Q3, Ford Motor posted an ROCE of 0.07%.

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 F

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.

For Ford Motor, the return on capital employed ratio shows the number of assets can actually help the company achieve higher returns, an important note investors will take into account when gauging the payoff from long-term financing strategies.

Q3 Earnings Insight

Ford Motor reported Q3 earnings per share at $0.65/share, which beat analyst predictions of $0.16/share.

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