Return on Capital Employed Overview: Accenture

After pulling data from Benzinga Pro it seems like during Q3, Accenture ACN earned $2.12 billion, a 28.13% increase from the preceding quarter. Accenture also posted a total of $13.26 billion in sales, a 9.73% increase since Q2. In Q2, Accenture earned $1.65 billion, and total sales reached $12.09 billion.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in Accenture'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 Q3, Accenture posted an ROCE of 0.11%.

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

Upcoming Earnings Estimate

Accenture reported Q3 earnings per share at $2.4/share, which beat analyst predictions of $2.23/share.