Ainsworth Game Technology (ASX:AGI) has caught the attention of investors due to its growing return on capital employed (ROCE) and expansion in capital employed. ROCE is a measure of a company’s pre-tax profit relative to the capital employed in the business, and Ainsworth Game Technology’s ROCE stands at 7.9%. While this figure is lower than the industry average, the company has shown significant growth in this metric over the last five years, with a 247% increase in ROCE despite flat capital employed. This suggests that the company is becoming more efficient in generating returns from its capital.
Despite these positive trends, the stock has only returned 5.7% to shareholders over the last five years, indicating that further research may be warranted for potential investors. Additionally, there is one warning sign identified with Ainsworth Game Technology that investors should be aware of.
Overall, investors looking for stocks with long-term growth potential should consider factors such as ROCE and capital employed to identify opportunities for value multiplication. While Ainsworth Game Technology has shown promising trends in terms of ROCE growth, further analysis is recommended before making any investment decisions.
For more information and analysis on Ainsworth Game Technology and other companies with strong financial performance, investors can access a free list of companies with good balance sheets and impressive returns on equity. Feedback on this article can be directed to the editorial team at simplywallst.com.
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