AMMO (NASDAQ:POWW) announced revenues of $24.20 million in the fourth quarter. Despite a 7.52 percent increase in profits, the corporation lost $461.05 thousand. In the third quarter, AMMO made $16.62 million in sales but lost $428.81 thousand in profits.
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. AMMO had a -0.0% ROCE 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. AMMO’s relatively high ROCE indicates that it is possibly 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.
In the instance of AMMO, the ROCE ratio indicates that the company’s assets may not be assisting it in achieving higher returns. Before making any long-term financial decisions, investors should consider this.
Q4 Earnings Insight AMMO reported $0.04 per share in Q4 earnings, beating analyst expectations of $-0.01/share./n
