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We Like These Underlying Return On Capital Trends At Vaziva Société anonyme (EPA:ALVAZ)

Simply Wall St · 4d ago

If you're looking for a multi-bagger, there's a few things to keep an eye out for. 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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Speaking of which, we noticed some great changes in Vaziva Société anonyme's (EPA:ALVAZ) returns on capital, so let's have a look.

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Understanding 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. The formula for this calculation on Vaziva Société anonyme is:

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

0.076 = €1.7m ÷ (€38m - €15m) (Based on the trailing twelve months to June 2025).

Therefore, Vaziva Société anonyme has an ROCE of 7.6%. Ultimately, that's a low return and it under-performs the Media industry average of 11%.

Check out our latest analysis for Vaziva Société anonyme

roce
ENXTPA:ALVAZ Return on Capital Employed January 8th 2026

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you're interested in investigating Vaziva Société anonyme's past further, check out this free graph covering Vaziva Société anonyme's past earnings, revenue and cash flow.

What Does the ROCE Trend For Vaziva Société anonyme Tell Us?

We're glad to see that ROCE is heading in the right direction, even if it is still low at the moment. Over the last three years, returns on capital employed have risen substantially to 7.6%. The amount of capital employed has increased too, by 94%. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.

On a side note, we noticed that the improvement in ROCE appears to be partly fueled by an increase in current liabilities. Essentially the business now has suppliers or short-term creditors funding about 40% of its operations, which isn't ideal. And with current liabilities at those levels, that's pretty high.

The Bottom Line

In summary, it's great to see that Vaziva Société anonyme can compound returns by consistently reinvesting capital at increasing rates of return, because these are some of the key ingredients of those highly sought after multi-baggers. Since the stock has returned a solid 87% to shareholders over the last three years, it's fair to say investors are beginning to recognize these changes. Therefore, we think it would be worth your time to check if these trends are going to continue.

On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for ALVAZ on our platform that is definitely worth checking out.

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