Wendy's's Return on Invested Capital Overview

Pulled from Benzinga Pro data, Wendy's WEN showed a loss in earnings since Q4, totaling $37.40 million. Sales, on the other hand, increased by 3.26% to $488.64 million during Q1. In Q4, Wendy's earned $52.13 million and total sales reached $473.20 million.

Why Is ROIC Significant?

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 Q1, Wendy's posted an ROIC of 2.14%.

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 Q1, Wendy's posted an ROIC of 2.14%.

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 Wendy's, the positive return on invested capital ratio of 2.14% 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.

Analyst Predictions

Wendy's reported Q1 earnings per share at $0.17/share, which did not meet analyst predictions of $0.18/share.

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