Citra Nusa Holdings Returns Rising
If you want a business that can multiply your returns, look for two things: a growing return on capital employed (ROCE) and more capital employed. This means the business has a great model with profitable reinvestment opportunities. Citra Nusa Holdings Berhad (KLSE:CNH) looks good based on its trends of return on capital.
ROCE: Understanding The Return On Capital
ROCE measures a company's pre-tax profit and capital used. Citra Nusa Holdings Berhad has a formula for ROCE calculation.
ROCE means Earnings Before Interest and Tax (EBIT) divided by (Total Assets - Current Liabilities).
In December 2022, the calculation shows that 0.02 is equal to RM1.4 million divided by RM87 million minus RM16 million.
Citra Nusa's ROCE is only 2.0%. That's not good. It's lower than the Retail Distributors industry average of 7.3%.
Check out our newest analysis of Citra Nusa Holdings Berhad. In it, we look at their financials and performance. Our analysis gives you a better understanding of the company's current situation. This knowledge can help you make well-informed investment decisions. Don't miss out on the valuable insights we provide in our analysis!
To research a stock, start with its historical performance. Citra Nusa Holdings Berhad's ROCE is shown above. You can also check out graphs of their past earnings, revenue, and cash flow for free.
ROCE Trending: Understanding Its Impact
The ROCE is improving but not as high compared to other companies. Capital employed is steady, but ROCE has increased by 543% in the last five years. This means the company is becoming more efficient and generating higher returns without extra investments. This is good news, and we should check what the management has planned for growth in the long term.
Citra Nusa Holdings Berhad is good at making money. They didn't spend more money but made more before paying interest and tax. Their stock has gone down 35% in the past five years. But we can invest if the price and other factors are good. We should look at their current worth and future plans to decide.
Citra Nusa Holdings Berhad is like other companies and has risks. We found 2 warning signs to keep in mind.
Want to invest in strong companies? Get a list of companies with strong balance sheets and high returns on equity. It's free.
If you have feedback on this article or feel concerned about its content, please contact us directly. You can also send an email to editorial-team (at) simplywallst.com.
This blog from Simply Wall St is for everyone. We talk about the data from the past and what experts think might happen in the future. We do it in a way that is fair and we don't give advice about your money. You need to make choices for yourself based on what you want and what you can afford. We try to be unbiased and look at facts that matter over a long time. We might miss any exciting news or ideas that affect the price of a stock. We don't own any of the stocks we talk about.
Sign up for a paid user research session and receive a US$30 Amazon Gift card. Your help will improve investing tools for individual investors like yourself. The session will only take an hour of your time. Click here to sign up.