Sea (NYSE:SE) Is Looking To Continue Growing Its Returns On Capital
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So on that note, Sea looks quite promising in regards to its trends of return on capital.Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income a company earns on the capital invested in its business. Analysts use this formula to calculate it for Sea:. Return on Capital Employed = Earnings Before Interest and Tax ÷ . So, Sea has an ROCE of 2.5%. In absolute terms, that's a low return and it also under-performs the Entertainment industry average of 10%.While Sea may not currently earn the highest returns, we've compiled a list