Skip to main content

Market Overview

Return On Capital Employed Overview: Morgan Stanley

Share:

Looking at Q2, Morgan Stanley (NYSE: MS) earned $4.36 billion, a 102.94% increase from the preceding quarter. Morgan Stanley also posted a total of $13.41 billion in sales, a 41.39% increase since Q1. In Q1, Morgan Stanley earned $2.15 billion, whereas sales reached $9.49 billion.

Why ROCE Is Significant

Changes in earnings and sales indicate shifts in Morgan Stanley’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, Morgan Stanley posted an ROCE of 0.05%.

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

Q2 Earnings Recap

Morgan Stanley reported Q2 earnings per share at $1.96/share, which beat analyst predictions of $1.12/share.

 

Related Articles (MS)

View Comments and Join the Discussion!

Posted-In: Earnings News

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com