With over 25 years of experience providing equipment financing, we’ve helped over 10,000 owners and vendors advance their businesses. American Financial Services provides real solutions for personal and entrepreneurs financial needs. Analyst Predictionsįirst American Financial reported Q1 earnings per share at $0.49/share, which did not meet analyst predictions of $0.7/share. American Capital Group is a nationwide direct lender dedicated to helping you grow your business. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

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, ultimately, earnings per share (EPS) growth.įor First American Financial, the positive return on capital employed ratio of 0.01% suggests that management is allocating their capital effectively.

The average value of American miles is around. A relatively high ROCE shows First American Financial is potentially operating at a higher level of efficiency than other companies in its industry. (399 11.20) / 21,000 miles 1.85¢ per mile Thats a really great redemption, but you should know this specific example isnt always the norm. ROCE is a powerful metric for comparing the effectiveness of capital allocation for similar companies. It is a good measure of a company's recent performance, but does not account for factors that could affect earnings and sales in the near future.

It is important to keep in mind that ROCE evaluates past performance and is not used as a predictive tool.

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