There's Been No Shortage Of Growth Recently For Aran Research & Development (1982)'s (TLV:ARAN) Returns On Capital
There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So on that note, Aran Research & Development (1982) (TLV:ARAN) looks quite promising in regards to its trends of return on capital.
What Is Return On Capital Employed (ROCE)?
Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. The formula for this calculation on Aran Research & Development (1982) is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.12 = ₪16m ÷ (₪193m - ₪61m) (Based on the trailing twelve months to June 2025).
Therefore, Aran Research & Development (1982) has an ROCE of 12%. On its own, that's a standard return, however it's much better than the 8.5% generated by the Commercial Services industry.
Check out our latest analysis for Aran Research & Development (1982)
While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how Aran Research & Development (1982) has performed in the past in other metrics, you can view this free graph of Aran Research & Development (1982)'s past earnings, revenue and cash flow.
So How Is Aran Research & Development (1982)'s ROCE Trending?
Aran Research & Development (1982) is displaying some positive trends. Over the last five years, returns on capital employed have risen substantially to 12%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 62%. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.
Our Take On Aran Research & Development (1982)'s ROCE
A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Aran Research & Development (1982) has. And a remarkable 148% total return over the last five years tells us that investors are expecting more good things to come in the future. In light of that, we think it's worth looking further into this stock because if Aran Research & Development (1982) can keep these trends up, it could have a bright future ahead.
On a separate note, we've found 3 warning signs for Aran Research & Development (1982) you'll probably want to know about.
If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.
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