by If we want to find a potential multi-bagger, there are often underlying trends that can give instructions. We usually want to notice a trend of growing yield on capital employed (ROCE) and in addition, an expansion base of capital hired. In fact, this means that a company has profitable initiatives that it can continue to reinvest, which is a characteristic of a composite machine. With that in mind we have noticed some promising trends Big Industries Berhad (KLSE: BIG) So let’s look a little deeper.
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If you have not worked with ROCE before, it measures the ‘return’ (profit before taxes) that generates a company of capital in his company. Analysts use this formula to calculate it for large industries Berhad:
Return of capital employed = income before interest and tax (EBIT) ÷ (total assets – current obligations)
0.077 = RM4.0M ÷ (RM64M – RM12M) (Based on the backlog from twelve months to March 2025).
So, so, Big Industries Berhad has a ROCE of 7.7%. In itself, that is a low return on capital, but it is in line with the average efficiency of the industry of 7.7%.
View our newest analysis for Big Industries Berhad
Although the past is not representative of the future, it can be useful to know how a company has performed historically, so we have this graph above. If you want to delve into historical income, view it free Graphs in which turnover and cash flow performance of Big Industries Berhad is described.
The fact that Big Industries Berhad now generates some profit before taxes from his earlier investments is very encouraging. Shareholders would undoubtedly be satisfied with this because the company made a loss five years ago, but now generates 7.7% on its capital. In addition, Big Industries Berhad employs 50% more capital than before, which is expected from a company trying to break through in profitability. We love this trend, because it tells us that the company has profitable reinvestment options that is available, and if it remains in the future, it can lead to a multi-bagger performance.
Another thing to note, large industries Berhad has reduced current obligations to 19% of the total assets in this period, which effectively reduces the amount of suppliers or short -term creditors. This tells us that Big Industries Berhad has grown its return without a dependence on increasing their current obligations, which we are very happy with.
