Return on Capital Employed Overview: EPAM Systems

After pulling data from Benzinga Pro it seems like during Q2, EPAM Systems EPAM earned $125.27 million, a 16.8% increase from the preceding quarter. EPAM Systems also posted a total of $881.37 million in sales, a 12.88% increase since Q1.

After pulling data from Benzinga Pro it seems like during Q2, EPAM Systems EPAM earned $125.27 million, a 16.8% increase from the preceding quarter. EPAM Systems also posted a total of $881.37 million in sales, a 12.88% increase since Q1. EPAM Systems earned $107.25 million, and sales totaled $780.77 million in Q1.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in EPAM Systems'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, EPAM Systems posted an ROCE of 0.06%.

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

Analyst Predictions

EPAM Systems reported Q2 earnings per share at $2.05/share, which beat analyst predictions of $1.93/share.