If you'd like, you can check out the forecasts from the analysts covering Revolve Group here for free. In absolute terms that's a great return and it's even better than the Specialty Retail industry average of 15%.Ĭheck out our latest analysis for Revolve Group NYSE:RVLV Return on Capital Employed March 24th 2023Ībove you can see how the current ROCE for Revolve Group compares to its prior returns on capital, but there's only so much you can tell from the past. Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)Ġ.20 = US$79m ÷ (US$579m - US$181m) (Based on the trailing twelve months to December 2022). Analysts use this formula to calculate it for Revolve Group: Return On Capital Employed (ROCE): What Is It?įor those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. So when we looked at Revolve Group ( NYSE:RVLV), they do have a high ROCE, but we weren't exactly elated from how returns are trending. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return.
Amongst other things, we'll want to see two things firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. There are a few key trends to look for if we want to identify the next multi-bagger.
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