Benzinga | Aug 26, 2021 10:32AM EDT

Return on Capital Employed Insights for Acorda Therapeutics

After pulling data from Benzinga Pro it seems like during Q2, Acorda Therapeutics (NASDAQ:ACOR) posted sales of $31.79 million. Earnings were up 42.24%, but Acorda Therapeutics still reported an overall loss of $16.49 million. Acorda Therapeutics collected $28.86 million in revenue during Q1, but reported earnings showed a $28.56 million loss.

What Is ROCE?

Changes in earnings and sales indicate shifts in Acorda Therapeutics'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 Q2, Acorda Therapeutics posted an ROCE of -0.09%.

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.

For Acorda Therapeutics, the return on capital employed ratio shows the current amount of assets may not actually be helping the company achieve higher returns, a note many investors will take into account when making long-term financial decisions.

Analyst Predictions

Acorda Therapeutics reported Q2 earnings per share at $-1.87/share, which beat analyst predictions of $-2.09/share.