Alkaline Water Co (NASDAQ:WTER) reported revenues of $11.45 million in the fourth quarter. Despite a 274.91% increase in profits, the corporation lost $15.83 million. Alkaline Water Co made $10.18 million in revenue in the third quarter, but recorded a $4.22 million loss.
What is the definition of Return On Capital Employed (ROCE)?
Return on Capital Employed (ROCE) is a metric that compares a company’s annual pre-tax profit to the capital it has invested. Earnings and sales fluctuations imply changes in a company’s ROCE. A higher ROCE is indicative of a company’s successful growth and, as a result, of better earnings per share in the future. A low or negative ROCE indicates the inverse. Alkaline Water Co had a ROCE of -1.44 percent in the fourth quarter.
Keep in mind that, while ROCE is a solid indicator of a company’s previous performance, it isn’t a very good prediction of earnings or sales in the near future.
The Return on Capital Employed (ROCE) is an important indicator for comparing similar businesses. Alkaline Water Co has a reasonably high ROCE, indicating that it may be more efficient than other companies in its industry. If the company is making a lot of money with its current capital, some of it can be reinvested in greater capital, resulting in stronger returns and higher earnings per share growth.
The return on capital employed ratio for Alkaline Water Co indicates that the existing level of assets may not be assisting the company in achieving higher returns, which many investors may consider when making long-term financial decisions.
Insights into Q4 Earnings
Alkaline Water Co reported $-0.06 earnings per share in the fourth quarter, missing analyst expectations of $-0.05./n
