Benzinga | Jan 31, 2022 10:24AM EST

Booz Allen Hamilton's Return on Invested Capital Insights

According to Benzinga Pro, during Q3, Booz Allen Hamilton (NYSE:BAH) earned $128.85 million, a 16.78% increase from the preceding quarter. Booz Allen Hamilton's sales decreased to $2.03 billion, a 3.56% change since Q2. In Q2, Booz Allen Hamilton earned $154.83 million, and total sales reached $2.11 billion.

What Is Return On Invested Capital?

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 Q3, Booz Allen Hamilton posted an ROIC of 5.63%.

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 Q3, Booz Allen Hamilton posted an ROIC of 5.63%.

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 Booz Allen Hamilton, the positive return on invested capital ratio of 5.63% 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

Booz Allen Hamilton reported Q3 earnings per share at $1.02/share, which beat analyst predictions of $0.99/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.