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    Some Investors May Be Worried About EcoPro BM's (KOSDAQ:247540) Returns On Capital

    Simply Wall St·01/02/2026 23:42:38
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    If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding 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. Having said that, from a first glance at EcoPro BM (KOSDAQ:247540) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look.

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    Return On Capital Employed (ROCE): What Is It?

    For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for EcoPro BM:

    Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

    0.036 = ₩98b ÷ (₩4.6t - ₩1.9t) (Based on the trailing twelve months to September 2025).

    So, EcoPro BM has an ROCE of 3.6%. In absolute terms, that's a low return and it also under-performs the Electrical industry average of 9.7%.

    View our latest analysis for EcoPro BM

    roce
    KOSDAQ:A247540 Return on Capital Employed January 2nd 2026

    Above you can see how the current ROCE for EcoPro BM compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for EcoPro BM .

    What Can We Tell From EcoPro BM's ROCE Trend?

    The trend of ROCE doesn't look fantastic because it's fallen from 7.5% five years ago, while the business's capital employed increased by 384%. That being said, EcoPro BM raised some capital prior to their latest results being released, so that could partly explain the increase in capital employed. The funds raised likely haven't been put to work yet so it's worth watching what happens in the future with EcoPro BM's earnings and if they change as a result from the capital raise.

    On a side note, EcoPro BM's current liabilities have increased over the last five years to 42% of total assets, effectively distorting the ROCE to some degree. Without this increase, it's likely that ROCE would be even lower than 3.6%. What this means is that in reality, a rather large portion of the business is being funded by the likes of the company's suppliers or short-term creditors, which can bring some risks of its own.

    The Bottom Line On EcoPro BM's ROCE

    We're a bit apprehensive about EcoPro BM because despite more capital being deployed in the business, returns on that capital and sales have both fallen. Since the stock has skyrocketed 198% over the last five years, it looks like investors have high expectations of the stock. In any case, the current underlying trends don't bode well for long term performance so unless they reverse, we'd start looking elsewhere.

    If you'd like to know more about EcoPro BM, we've spotted 2 warning signs, and 1 of them can't be ignored.

    While EcoPro BM may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.