Looking into Cal-Maine Foods's Return on Capital Employed

Pulled from Benzinga Pro data Cal-Maine Foods CALM reported Q4 sales of $349.80 million. Earnings fell to a loss of $10.52 million, resulting in a 7468.35% decrease from last quarter. In Q3, Cal-Maine Foods brought in $359.08 million in sales but lost $139.00 thousand in earnings.

What Is ROCE?

Changes in earnings and sales indicate shifts in Cal-Maine Foods'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, Cal-Maine Foods posted an ROCE of -0.01%.

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.

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 Cal-Maine Foods's case, the ROCE ratio shows the amount of assets may not be helping the company achieve higher returns. Investors may take this into account before making any long-term financial decisions.

Upcoming Earnings Estimate

Cal-Maine Foods reported Q4 earnings per share at $-0.09/share, which did not meet analyst predictions of $0.39/share.