Published on 19 Mar 2024 on Simply Wall St. via Yahoo Finance
Some Investors May Be Worried About Fresenius SE KGaA's (ETR:FRE) Returns On Capital
When it comes to investing, there are some useful financial metrics that can warn us when a business is potentially in trouble. More often than not, we'll see a declining return on capital employed (ROCE) and a declining amount of capital employed. This combination can tell you that not only is the company investing less, it's earning less on what it does invest. On that note, looking into Fresenius SE KGaA (ETR:FRE), we weren't too upbeat about how things were going.
Understanding Return On Capital Employed (ROCE)
If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for Fresenius SE KGaA: