The Return Trends At Quickstep Holdings (ASX:QHL) Look...

The Return Trends At Quickstep Holdings (ASX:QHL) Look Promising
Simply Wall St.
Wed, 23 February 2022, 4:30 am
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. Speaking of which, we noticed some great changes in Quickstep Holdings' (ASX:QHL) returns on capital, so let's have a look.

What is Return On Capital Employed (ROCE)? For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business.

To calculate this metric for Quickstep Holdings, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)0.11 = AU$5.7m ÷ (AU$74m - AU$22m) (Based on the trailing twelve months to December 2021).Thus, Quickstep Holdings has an ROCE of 11%. In absolute terms, that's a satisfactory return, but compared to the Aerospace & Defense industry average of 8.0% it's much better.

See our latest analysis for Quickstep Holdings roce In the above chart we have measured Quickstep Holdings' prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free report on analyst forecasts for the company.The Trend Of ROCE The fact that Quickstep Holdings is now generating some pre-tax profits from its prior investments is very encouraging. Shareholders would no doubt be pleased with this because the business was loss-making five years ago but is is now generating 11% on its capital. And unsurprisingly, like most companies trying to break into the black, Quickstep Holdings is utilizing 133% more capital than it was five years ago. We like this trend, because it tells us the company has profitable reinvestment opportunities available to it, and if it continues going forward that can lead to a multi-bagger performance.
https://au.finance.yahoo.com/news/return-trends-quickstep-holdings-asx-213046779.html
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ASX Small Cap Lunch Wrap:
23 hours ago
And Quickstep Holdings (ASX:QHL) – the largest independent aerospace composite business in Australia — flagged strong growth in H1 FY22, with sales up 14% to $47.3m. Underlying pre-tax profit was up 82% to $2m.
https://**promotion blocked**/news/asx-small-cap-lunch-wrap-whos-getting-a-little-too-comfortable-today/

ASX Closing Bell: Break out the canaries
19 hours ago
Quickstep Holdings (ASX:QHL) has flagged strong first half sales, and a more than 80% bump in underlying profit – it’s claim is to be the largest independent Aussie aerospace composite business.
https://**promotion blocked**/news/closing-bell-break-out-the-canaries-world-waits-for-war-as-asx-small-caps-crash/