Return On Capital Employed Overview: Mesa Air Group

Looking at Q2, Mesa Air Group MESA earned $16.76 million, a 37.86% increase from the preceding quarter. Mesa Air Group's sales decreased to $97.28 million, a 35.31% change since Q1. In Q1, Mesa Air Group earned $26.97 million and total sales reached $150.37 million.

Why ROCE Is Significant

Changes in earnings and sales indicate shifts in Mesa Air Group'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 Q2, Mesa Air Group posted an ROCE of 0.03%.

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 Mesa Air Group 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 Mesa Air Group's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Q2 Earnings Recap

Mesa Air Group reported Q2 earnings per share at $0.23/share, which beat analyst predictions of $0.17/share.