Return on Capital Employed Insights for Live Nation Entertainment

After pulling data from Benzinga Pro it seems like during Q2, Live Nation Entertainment LYV posted sales of $575.95 million. Earnings were up 57.99%, but Live Nation Entertainment still reported an overall loss of $127.31 million. In Q1, Live Nation Entertainment brought in $290.61 million in sales but lost $303.03 million in earnings.

What Is Return On Capital Employed?

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, Live Nation Entertainment posted an ROCE of 0.39%.

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.

For Live Nation Entertainment, the return on capital employed ratio shows the number of assets can actually help the company achieve higher returns, an important note investors will take into account when gauging the payoff from long-term financing strategies.

Analyst Predictions

Live Nation Entertainment reported Q2 earnings per share at $-0.9/share, which beat analyst predictions of $-1.2/share.