Buhler Industries, the machinery company listed as TSE:BUI, has seen a positive trend in its Return on Capital Employed (ROCE), a key profitability indicator, despite still falling short of the industry average. As of Friday, the company’s ROCE stands at 2.1%, trailing behind the industry standard of 8.1%.
The recent calculation of Buhler Industries’ ROCE is based on Earnings Before Interest and Tax (EBIT) of CA$2.8 million divided by the difference between total assets of CA$233 million and current liabilities of CA$97 million. The calculation draws upon data from the trailing twelve months leading up to June 2023.
Over the past five years, Buhler Industries has demonstrated significant financial improvement. The company has transitioned from a period of losses on invested capital to achieving profitability, indicating that its investments are now yielding positive returns.
In addition to reaching profitability, Buhler Industries has also managed to decrease its capital employed by 21% over the past five years. This reduction could be interpreted as a sign of efficiency, though it may also suggest that the company is selling off some of its assets.
The historical performance of Buhler Industries offers potential investors an insightful perspective on how the company has transitioned from incurring losses to achieving profitability while reducing its capital employed. However, despite these positive trends, there is still room for further improvement as Buhler Industries’ ROCE remains below the industry average.
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