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ROCE Insights For Core-Mark Holding Co

Looking at Q1, Core-Mark Holding Co (NASDAQ:CORE) earned $14.00 million, a 43.32% increase from the preceding quarter. Core-Mark Holding Co's sales decreased to $3.93 billion, a 7.53% change since Q4. Core-Mark Holding Co earned $24.70 million, and sales t...

05/07/2021 11:52

Looking at Q1, Core-Mark Holding Co (NASDAQ:CORE) earned $14.00 million, a 43.32% increase from the preceding quarter. Core-Mark Holding Co's sales decreased to $3.93 billion, a 7.53% change since Q4. Core-Mark Holding Co earned $24.70 million, and sales totaled $4.25 billion in Q4.

Why ROCE Is Significant

Return on Capital Employed is a measure of yearly pre-tax profit relative to capital employed by a business. Changes in earnings and sales indicate shifts in a company's ROCE. A higher ROCE is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROCE suggests the opposite. In Q1, Core-Mark Holding Co posted an ROCE of 0.02%.

Keep in mind, while ROCE is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or 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.

In Core-Mark Holding Co's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Q1 Earnings Recap

Core-Mark Holding Co reported Q1 earnings per share at $0.36/share, which beat analyst predictions of $0.22/share.