Investors Will Want Fushiki Kairiku UnsoLtd's (TSE:9361) Growth In ROCE To Persist

There are a few key trends to look for if we want to identify the next multi-bagger. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So on that note, Fushiki Kairiku UnsoLtd (TSE:9361) looks quite promising in regards to its trends of return on capital.

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Understanding Return On Capital Employed (ROCE)

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. To calculate this metric for Fushiki Kairiku UnsoLtd, this is the formula:

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

0.065 = JP¥1.3b ÷ (JP¥23b - JP¥3.9b) (Based on the trailing twelve months to September 2025).

So, Fushiki Kairiku UnsoLtd has an ROCE of 6.5%. On its own that's a low return, but compared to the average of 4.2% generated by the Infrastructure industry, it's much better.

See our latest analysis for Fushiki Kairiku UnsoLtd

Historical performance is a great place to start when researching a stock so above you can see the gauge for Fushiki Kairiku UnsoLtd's ROCE against it's prior returns. If you're interested in investigating Fushiki Kairiku UnsoLtd's past further, check out this free graph covering Fushiki Kairiku UnsoLtd's past earnings, revenue and cash flow.

What Can We Tell From Fushiki Kairiku UnsoLtd's ROCE Trend?

Fushiki Kairiku UnsoLtd is showing promise given that its ROCE is trending up and to the right. More specifically, while the company has kept capital employed relatively flat over the last five years, the ROCE has climbed 147% in that same time. Basically the business is generating higher returns from the same amount of capital and that is proof that there are improvements in the company's efficiencies. It's worth looking deeper into this though because while it's great that the business is more efficient, it might also mean that going forward the areas to invest internally for the organic growth are lacking.

The Bottom Line On Fushiki Kairiku UnsoLtd's ROCE

To bring it all together, Fushiki Kairiku UnsoLtd has done well to increase the returns it's generating from its capital employed. And investors seem to expect more of this going forward, since the stock has rewarded shareholders with a 94% return over the last five years. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence.

On a separate note, we've found 1 warning sign for Fushiki Kairiku UnsoLtd you'll probably want to know about.

While Fushiki Kairiku UnsoLtd isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.