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Return On Capital Employed Overview: Myovant Sciences

Myovant Sciences (NYSE:MYOV) reported Q4 sales of $24.61 million. Earnings fell to a loss of $76.95 million, resulting in a 1.75% decrease from last quarter. In Q3, Myovant Sciences brought in $1.38 million in sales but lost $78.32 million in earnings.

05/11/2021 11:03

Myovant Sciences (NYSE:MYOV) reported Q4 sales of $24.61 million. Earnings fell to a loss of $76.95 million, resulting in a 1.75% decrease from last quarter. In Q3, Myovant Sciences brought in $1.38 million in sales but lost $78.32 million in earnings.

Why ROCE Is Significant

Changes in earnings and sales indicate shifts in Myovant Sciences's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q4, Myovant Sciences posted an ROCE of 0.22%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows Myovant Sciences is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and earnings per share growth.

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

Q4 Earnings Recap

Myovant Sciences reported Q4 earnings per share at $-0.89/share, which beat analyst predictions of $-0.99/share.