Return on Capital Employed Insights for Wyndham Hotels & Resorts

After pulling data from Benzinga Pro it seems like during Q2, Wyndham Hotels & Resorts WH earned $133.00 million, a 111.11% increase from the preceding quarter. Wyndham Hotels & Resorts also posted a total of $406.00 million in sales, a 33.99% increase since Q1. Wyndham Hotels & Resorts earned $63.00 million, and sales totaled $303.00 million in Q1.

Why ROCE Is Significant

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 Q2, Wyndham Hotels & Resorts posted an ROCE of 0.13%.

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 Wyndham Hotels & Resorts's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Upcoming Earnings Estimate

Wyndham Hotels & Resorts reported Q2 earnings per share at $0.95/share, which beat analyst predictions of $0.63/share.