Barnes & Noble Education Insights: Return On Capital Employed

During Q4, Barnes & Noble Education BNED brought in sales totaling $222.78 million. However, earnings decreased 8.36%, resulting in a loss of $59.29 million. Barnes & Noble Education collected $411.61 million in revenue during Q3, but reported earnings showed a $64.70 million loss.

What Is Return On Capital Employed?

Return on Capital Employed is a measure of yearly pre-tax profit relative to capital employed by a business. Changes in earnings and sales indicate shifts in a company's ROCE. A higher ROCE 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 ROCE suggests the opposite. In Q4, Barnes & Noble Education posted an ROCE of -0.2%.

Keep in mind, while ROCE 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 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 Barnes & Noble Education'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.

Q4 Earnings Insight

Barnes & Noble Education reported Q4 earnings per share at $-0.64/share, which did not meet analyst predictions of $-0.57/share.