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Return On Capital Employed Overview: OraSure Technologies


Benzinga Insights , Benzinga Staff Writer

 


March 30, 2021 10:44am


 
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Looking at Q4, OraSure Technologies (NASDAQ:OSUR) earned $7.88 million, a 79.82% increase from the preceding quarter. OraSure Technologies also posted a total of $62.85 million in sales, a 30.92% increase since Q3. OraSure Technologies earned $4.38 million, and sales totaled $48.01 million in Q3.

Why ROCE Is Significant

Changes in earnings and sales indicate shifts in OraSure Technologies’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q4, OraSure Technologies posted an ROCE of 0.02%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company’s recent performance, but several factors could affect earnings and sales in the near future.

Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.

For OraSure Technologies, the return on capital employed ratio shows the number of assets can actually help the company achieve higher returns, an important note investors will take into account when gauging the payoff from long-term financing strategies.

Q4 Earnings Insight

OraSure Technologies reported Q4 earnings per share at $0.03/share, which did not meet analyst predictions of $0.07/share.

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