Returns On Capital Signal Tricky Times Ahead For Levi Strauss (NYSE:LEVI)

Simply Wall St.12-12

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside ...

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Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside ...</p>\n\n<a href=\"https://finance.yahoo.com/news/returns-capital-signal-tricky-times-142927596.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LEVI","symbol_name":"李维斯","start_time":0,"source_url":"https://finance.yahoo.com/news/returns-capital-signal-tricky-times-142927596.html","article_id":"2490387472","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/MGU3wjIcw4ceLPNcT.BzHg--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/cb577674b7e557d971f138507100a6d5"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2490387472","pubTimestamp":1734013767,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Did you know there are some financial metrics that can provide clues of a potential multi-bagger?Typically, we'll want to notice a trend of growing return on capital employed  and alongside that, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after investigating Levi Strauss , we don't think it's current trends fit the mold of a multi-bagger.Return On Capital Employed : What Is It?For those who don't know, ROCE is a measure of a company's yearly pre-tax profit , relative to the capital employed in the business. The formula for this calculation on Levi Strauss is:. Return on Capital Employed = Earnings Before Interest and Tax  ÷ . Therefore, Levi Strauss has an ROCE of 13%. By itself that's a normal return on capital and it's in line with the industry's average returns of 13%.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LEVI":"李维斯","NYSE":"纽交所","LU1815336091.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AUP\" (USD) INC","BK4202":"服装、服饰与奢侈品","LU0757428866.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AE\" (USD) ACC","EBIT":"Harbor AlphaEdge Small Cap Earners ETF"},"translate_title":"资本回报率预示着李维斯（纽约证券交易所股票代码：LEVI）未来的艰难时期","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EBIT":1,"LEVI":1,"NYSE":1},"content_text":"Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after investigating Levi Strauss (NYSE:LEVI), we don't think it's current trends fit the mold of a multi-bagger. \n Return On Capital Employed (ROCE): What Is It? \n For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. The formula for this calculation on Levi Strauss is: \n Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) \n0.13 = US$576m ÷ (US$6.3b - US$1.9b) (Based on the trailing twelve months to August 2024).\n Therefore, Levi Strauss has an ROCE of 13%. By itself that's a normal return on capital and it's in line with the industry's average returns of 13%. \n View our latest analysis for Levi Strauss \n\n\n\n  NYSE:LEVI Return on Capital Employed December 12th 2024\n \n\n Above you can see how the current ROCE for Levi Strauss compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Levi Strauss . \n So How Is Levi Strauss' ROCE Trending? \n In terms of Levi Strauss' historical ROCE movements, the trend isn't fantastic. Around five years ago the returns on capital were 19%, but since then they've fallen to 13%. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line. \n What We Can Learn From Levi Strauss' ROCE \n Bringing it all together, while we're somewhat encouraged by Levi Strauss' reinvestment in its own business, we're aware that returns are shrinking. Additionally, the stock's total return to shareholders over the last five years has been flat, which isn't too surprising. Therefore based on the analysis done in this article, we don't think Levi Strauss has the makings of a multi-bagger. \n One more thing, we've spotted   3 warning signs  facing Levi Strauss that you might find interesting. \n While Levi Strauss may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2490387472"}