Return on Capital Employed Overview: Progressive

Pulled from Benzinga Pro data Progressive PGR showed a loss in earnings since Q4, totaling $1.92 billion. Sales, on the other hand, increased by 2.07% to $10.42 billion during Q1. Progressive reached earnings of $2.16 billion and sales of $10.21 billion in Q4.

What Is ROCE?

Changes in earnings and sales indicate shifts in Progressive'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 Q1, Progressive 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.

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

Analyst Predictions

Progressive reported Q1 earnings per share at $1.73/share, which beat analyst predictions of $1.4/share.