Looking at Q4, Marsh & McLennan (NYSE:MMC) earned $571.00 million, a 5.74% increase from the preceding quarter. Marsh & McLennan also posted a total of $4.42 billion in sales, a 11.29% increase since Q3. In Q3, Marsh & McLennan earned $540.00 million, and total sales reached $3.97 billion.
What Is Return On Capital Employed?
Changes in earnings and sales indicate shifts in Marsh & McLennan’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q4, Marsh & McLennan posted an ROCE of 0.06%.
It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company’s recent performance, but several factors could affect earnings and sales in the near future.
Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.
In Marsh & McLennan’s case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.
Q4 Earnings Recap
Marsh & McLennan reported Q4 earnings per share at $1.19/share, which beat analyst predictions of $1.12/share.
