NAPCO Security Techs (NASDAQ:NSSC) – NAPCO Security Earnings Outlook: Return on Capital Employed


According to Benzinga Pro, during the fourth quarter, NAPCO Safety NSSC earned $7.54 million, an increase of 130.28% over the previous quarter. NAPCO Security also reported total sales of $43.23 million, a 20.4% increase from the third quarter. In the third quarter, NAPCO Security earned $3.27 million and total sales reached $35.91 million.

What is ROCE?

Return on capital employed is a measure of annual pre-tax profit relative to the capital employed by a business. Changes in profits and sales indicate changes in a company’s ROCE. A higher ROCE is generally indicative of a company’s successful growth and is a sign of higher earnings per share in the future. A low or negative ROCE suggests otherwise. In the fourth quarter, NAPCO Security posted a ROCE of 0.07%.

Keep in mind that while ROCE is a good measure of a company’s recent performance, it’s not a very reliable indicator of a company’s earnings or sales in the near future.

ROCE is a powerful metric for comparing the efficiency of capital allocation for similar companies. A relatively high ROCE shows that NAPCO Security potentially operates at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital, which will generally lead to higher returns and ultimately growth in earnings per share ( EPS).

For NAPCO Security, the positive return on investment ratio of 0.07% suggests that management is allocating its capital efficiently. Efficient capital allocation is a positive indicator that a company will achieve more sustainable success and favorable long-term returns.

Analyst predictions

NAPCO Security reported fourth-quarter earnings per share of $0.2/share, beating analysts’ forecast of $0.11/share.

This article was generated by Benzinga’s automated content engine and reviewed by an editor.


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