Benzinga | Jul 13, 2021 11:07AM EDT

Beyond Air: Return On Capital Employed Insights

During Q4, Beyond Air (NASDAQ:XAIR) brought in sales totaling $145.63 thousand. However, earnings decreased 10.37%, resulting in a loss of $5.03 million. Beyond Air collected $148.79 thousand in revenue during Q3, but reported earnings showed a $5.62 million loss.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in Beyond Air'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 Q4, Beyond Air posted an ROCE of -0.17%.

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.

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows Beyond Air is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and earnings per share growth.

In Beyond Air's case, the ROCE ratio shows the amount of assets may not be helping the company achieve higher returns. Investors may take this into account before making any long-term financial decisions.

Q4 Earnings Recap

Beyond Air reported Q4 earnings per share at $-0.24/share, which beat analyst predictions of $-0.31/share.