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Stock impact report

Investors Shouldn't Overlook The Favourable Returns On Capital At Karooooo (NASDAQ:KARO) [Yahoo! Finance]

Karooooo Ltd. - Ordinary shares (KARO) 
Company Research Source: Yahoo! Finance
One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Ergo, when we looked at the ROCE trends at Karooooo NASDAQ:KARO ), we liked what we saw. Return On Capital Employed (ROCE): What Is It? If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Karooooo, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.35 = R1.2b ÷ (R4.4b - R1.1b) (Based on the trailing twelve months to August 2024) Therefore, Karooooo has an ROCE of 35%. That's a fantastic return and not only that, it outpaces the average of 8.8% earned by companies in a similar i Show less Read more
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