Karat Packaging's Return on Invested Capital Overview

According to Benzinga Pro, during Q2, Karat Packaging KRT earned $6.87 million, a 82.18% increase from the preceding quarter. Karat Packaging also posted a total of $94.53 million in sales, a 24.91% increase since Q1. In Q1, Karat Packaging earned $3.77 million, and total sales reached $75.67 million.

What Is ROIC?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Karat Packaging posted an ROIC of 4.52%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Karat Packaging posted an ROIC of 4.52%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

For Karat Packaging, the positive return on invested capital ratio of 4.52% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Analyst Predictions

Karat Packaging reported Q2 earnings per share at $0.5/share, which beat analyst predictions of $0.33/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.