Benzinga | Jul 13, 2021 11:04AM EDT

Return On Capital Employed Overview: FactSet Research Systems

Looking at Q3, FactSet Research Systems (NYSE:FDS) earned $117.70 million, a 1.35% increase from the preceding quarter. FactSet Research Systems also posted a total of $399.56 million in sales, a 1.98% increase since Q2. In Q2, FactSet Research Systems earned $116.13 million, and total sales reached $391.79 million.

What Is ROCE?

Changes in earnings and sales indicate shifts in FactSet Research Systems's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q3, FactSet Research Systems posted an ROCE of 0.11%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and 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.

In FactSet Research Systems's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Q3 Earnings Insight

FactSet Research Systems reported Q3 earnings per share at $2.72/share, which did not meet analyst predictions of $2.74/share.