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    Bi Matrix (KOSDAQ:413640) Will Be Hoping To Turn Its Returns On Capital Around

    Simply Wall St·01/10/2026 00:08:54
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    If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, 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. However, after briefly looking over the numbers, we don't think Bi Matrix (KOSDAQ:413640) has the makings of a multi-bagger going forward, but let's have a look at why that may be.

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

    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. To calculate this metric for Bi Matrix, this is the formula:

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

    0.018 = ₩759m ÷ (₩49b - ₩7.9b) (Based on the trailing twelve months to September 2025).

    So, Bi Matrix has an ROCE of 1.8%. Ultimately, that's a low return and it under-performs the Software industry average of 6.2%.

    See our latest analysis for Bi Matrix

    roce
    KOSDAQ:A413640 Return on Capital Employed January 10th 2026

    Above you can see how the current ROCE for Bi Matrix 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 Bi Matrix .

    How Are Returns Trending?

    When we looked at the ROCE trend at Bi Matrix, we didn't gain much confidence. Over the last five years, returns on capital have decreased to 1.8% from 4.1% five years ago. However it looks like Bi Matrix might be reinvesting for long term growth because while capital employed has increased, the company's sales haven't changed much in the last 12 months. It may take some time before the company starts to see any change in earnings from these investments.

    On a side note, Bi Matrix has done well to pay down its current liabilities to 16% of total assets. That could partly explain why the ROCE has dropped. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Since the business is basically funding more of its operations with it's own money, you could argue this has made the business less efficient at generating ROCE.

    The Key Takeaway

    To conclude, we've found that Bi Matrix is reinvesting in the business, but returns have been falling. Since the stock has gained an impressive 9.1% over the last year, investors must think there's better things to come. However, unless these underlying trends turn more positive, we wouldn't get our hopes up too high.

    Like most companies, Bi Matrix does come with some risks, and we've found 1 warning sign that you should be aware of.

    While Bi Matrix 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.