According to Benzinga Pro data The Shyft Group (NASDAQ:SHYF) posted a 1.94% decrease in earnings from Q3. Sales, however, increased by 1.72% over the previous quarter to $277.30 million. Despite the increase in sales this quarter, the decrease in earnings may suggest The Shyft Group is not utilizing their capital as effectively as possible. In Q3, The Shyft Group earned $21.00 million and total sales reached $272.62 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 Q4, The Shyft Group posted an ROIC of 11.19%.
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, The Shyft Group posted an ROIC of 11.19%.
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 The Shyft Group, the positive return on invested capital ratio of 11.19% 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
The Shyft Group reported Q4 earnings per share at $0.56/share, which beat analyst predictions of $0.47/share.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
