ROCE Insights For Jack In The Box

Jack In The Box JACK posted Q2 earnings of $63.15 million, an increase from Q1 of 27.72%. Sales dropped to $257.22 million, a 24.02% decrease between quarters. In Q1, Jack In The Box earned $87.37 million, and total sales reached $338.54 million.

What Is ROCE?

Changes in earnings and sales indicate shifts in Jack In The Box'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 Q2, Jack In The Box posted an ROCE of -0.08%.

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.

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows Jack In The Box is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and earnings per share growth.

In Jack In The Box'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.

Q2 Earnings Insight

Jack In The Box reported Q2 earnings per share at $1.48/share, which beat analyst predictions of $1.29/share.