Looking at Q4, Take-Two Interactive (NASDAQ:TTWO) earned $255.82 million, a 45.3% increase from the preceding quarter. Take-Two Interactive’s sales decreased to $784.53 million, a 3.65% change since Q3. In Q3, Take-Two Interactive earned $176.06 million, whereas sales reached $814.28 million.
What Is ROCE?
Changes in earnings and sales indicate shifts in Take-Two Interactive’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, Take-Two Interactive posted an ROCE of 0.08%.
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 Take-Two Interactive’s case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.
Q4 Earnings Insight
Take-Two Interactive reported Q4 earnings per share at $1.4/share, which beat analyst predictions of $0.67/share.
