Return on Capital Employed Overview: DASAN Zhone Solutions

After pulling data from Benzinga Pro it seems like during Q2, DASAN Zhone Solutions DZSI posted sales of $82.70 million. Earnings were up 79.5%, but DASAN Zhone Solutions still reported an overall loss of $3.45 million. DASAN Zhone Solutions collected $81.03 million in revenue during Q1, but reported earnings showed a $16.84 million loss.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in DASAN Zhone Solutions'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, DASAN Zhone Solutions 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 DASAN Zhone Solutions 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 DASAN Zhone Solutions'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.

Analyst Predictions

DASAN Zhone Solutions reported Q2 earnings per share at $-0.03/share, which did not meet analyst predictions of $-0.03/share.