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There's Been No Shortage Of Growth Recently For Korean AirlinesLtd's (KRX:003490) Returns On Capital

Simply Wall St · 1d ago

What are the early trends we should look for to identify a stock that could multiply in value over the long term? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Speaking of which, we noticed some great changes in Korean AirlinesLtd's (KRX:003490) returns on capital, so let's have a look.

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Return On Capital Employed (ROCE): What Is It?

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for Korean AirlinesLtd:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.042 = ₩1.4t ÷ (₩49t - ₩15t) (Based on the trailing twelve months to September 2025).

So, Korean AirlinesLtd has an ROCE of 4.2%. Ultimately, that's a low return and it under-performs the Airlines industry average of 8.2%.

View our latest analysis for Korean AirlinesLtd

roce
KOSE:A003490 Return on Capital Employed December 6th 2025

In the above chart we have measured Korean AirlinesLtd's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free analyst report for Korean AirlinesLtd .

How Are Returns Trending?

The fact that Korean AirlinesLtd is now generating some pre-tax profits from its prior investments is very encouraging. About five years ago the company was generating losses but things have turned around because it's now earning 4.2% on its capital. Not only that, but the company is utilizing 86% more capital than before, but that's to be expected from a company trying to break into profitability. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, both common traits of a multi-bagger.

Our Take On Korean AirlinesLtd's ROCE

In summary, it's great to see that Korean AirlinesLtd has managed to break into profitability and is continuing to reinvest in its business. Considering the stock has delivered 7.8% to its stockholders over the last five years, it may be fair to think that investors aren't fully aware of the promising trends yet. So with that in mind, we think the stock deserves further research.

Like most companies, Korean AirlinesLtd does come with some risks, and we've found 2 warning signs that you should be aware of.

While Korean AirlinesLtd isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.