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We Like SCREEN Holdings' (TSE:7735) Returns And Here's How They're Trending

Simply Wall St · 2d ago

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. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So when we looked at the ROCE trend of SCREEN Holdings (TSE:7735) we really liked what we saw.

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What Is Return On Capital Employed (ROCE)?

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. To calculate this metric for SCREEN Holdings, this is the formula:

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

0.28 = JP¥124b ÷ (JP¥667b - JP¥225b) (Based on the trailing twelve months to September 2025).

So, SCREEN Holdings has an ROCE of 28%. In absolute terms that's a great return and it's even better than the Semiconductor industry average of 11%.

See our latest analysis for SCREEN Holdings

roce
TSE:7735 Return on Capital Employed December 18th 2025

In the above chart we have measured SCREEN Holdings' prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering SCREEN Holdings for free.

What Can We Tell From SCREEN Holdings' ROCE Trend?

SCREEN Holdings is displaying some positive trends. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 28%. The amount of capital employed has increased too, by 98%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.

What We Can Learn From SCREEN Holdings' ROCE

All in all, it's terrific to see that SCREEN Holdings is reaping the rewards from prior investments and is growing its capital base. And a remarkable 315% total return over the last five years tells us that investors are expecting more good things to come in the future. In light of that, we think it's worth looking further into this stock because if SCREEN Holdings can keep these trends up, it could have a bright future ahead.

One more thing: We've identified 3 warning signs with SCREEN Holdings (at least 1 which is potentially serious) , and understanding these would certainly be useful.

SCREEN Holdings is not the only stock earning high returns. If you'd like to see more, check out our free list of companies earning high returns on equity with solid fundamentals.