Garmin's Return on Invested Capital Insights

Garmin's Return on Invested Capital Insights

According to Benzinga Pro, during Q4, Garmin GRMN earned $286.14 million, a 10.46% increase from the preceding quarter. Garmin also posted a total of $1.39 billion in sales, a 16.78% increase since Q3. In Q3, Garmin earned $259.04 million, and total sales reached $1.19 billion.

What Is Return On Invested Capital?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC 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 ROIC suggests the opposite. In Q4, Garmin posted an ROIC of 4.83%.

Keep in mind, while ROIC 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 Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC 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 ROIC suggests the opposite. In Q4, Garmin posted an ROIC of 4.83%.

Keep in mind, while ROIC 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.

For Garmin, the positive return on invested capital ratio of 4.83% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Upcoming Earnings Estimate

Garmin reported Q4 earnings per share at $1.55/share, which beat analyst predictions of $1.37/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

Posted In: BZI-ROCEEarnings