CRA International Earnings Perspective: Return On Invested Capital

According to Benzinga Pro, during Q1, CRA International CRAI earned $11.43 million, a 31.83% increase from the preceding quarter. CRA International also posted a total of $148.38 million in sales, a 10.1% increase since Q4. CRA International earned $8.67 million, and sales totaled $134.77 million in Q4.

What Is Return On Invested Capital?

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 Q1, CRA International posted an ROIC of 5.77%.

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 CRA International, the positive return on invested capital ratio of 5.77% 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.