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Returns At Per Aarsleff Holding (CPH:PAAL B) Appear To Be Weighed Down

Simply Wall St · 5d ago

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, 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 ran our eye over Per Aarsleff Holding's (CPH:PAAL B) trend of ROCE, we liked what we saw.

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Understanding Return On Capital Employed (ROCE)

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on Per Aarsleff Holding is:

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

0.14 = kr.1.1b ÷ (kr.16b - kr.7.9b) (Based on the trailing twelve months to September 2025).

So, Per Aarsleff Holding has an ROCE of 14%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Construction industry average of 13%.

View our latest analysis for Per Aarsleff Holding

roce
CPSE:PAAL B Return on Capital Employed January 7th 2026

In the above chart we have measured Per Aarsleff Holding's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Per Aarsleff Holding .

So How Is Per Aarsleff Holding's ROCE Trending?

While the current returns on capital are decent, they haven't changed much. The company has consistently earned 14% for the last five years, and the capital employed within the business has risen 78% in that time. Since 14% is a moderate ROCE though, it's good to see a business can continue to reinvest at these decent rates of return. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns.

On a side note, Per Aarsleff Holding's current liabilities are still rather high at 50% of total assets. This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.

The Bottom Line

The main thing to remember is that Per Aarsleff Holding has proven its ability to continually reinvest at respectable rates of return. And long term investors would be thrilled with the 234% return they've received over the last five years. So even though the stock might be more "expensive" than it was before, we think the strong fundamentals warrant this stock for further research.

If you're still interested in Per Aarsleff Holding it's worth checking out our FREE intrinsic value approximation for PAAL B to see if it's trading at an attractive price in other respects.

For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity.