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    Investors Will Want ANA Holdings' (TSE:9202) Growth In ROCE To Persist

    Simply Wall St·12/11/2025 22:49:20
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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. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So on that note, ANA Holdings (TSE:9202) looks quite promising in regards to its trends of return on capital.

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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. To calculate this metric for ANA Holdings, this is the formula:

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

    0.077 = JP¥186b ÷ (JP¥3.7t - JP¥1.3t) (Based on the trailing twelve months to September 2025).

    Thus, ANA Holdings has an ROCE of 7.7%. On its own that's a low return on capital but it's in line with the industry's average returns of 8.2%.

    See our latest analysis for ANA Holdings

    roce
    TSE:9202 Return on Capital Employed December 11th 2025

    Above you can see how the current ROCE for ANA Holdings 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 ANA Holdings .

    The Trend Of ROCE

    ANA Holdings has broken into the black (profitability) and we're sure it's a sight for sore eyes. While the business was unprofitable in the past, it's now turned things around and is earning 7.7% on its capital. On top of that, what's interesting is that the amount of capital being employed has remained steady, so the business hasn't needed to put any additional money to work to generate these higher returns. So while we're happy that the business is more efficient, just keep in mind that could mean that going forward the business is lacking areas to invest internally for growth. Because in the end, a business can only get so efficient.

    For the record though, there was a noticeable increase in the company's current liabilities over the period, so we would attribute some of the ROCE growth to that. Effectively this means that suppliers or short-term creditors are now funding 36% of the business, which is more than it was five years ago. It's worth keeping an eye on this because as the percentage of current liabilities to total assets increases, some aspects of risk also increase.

    In Conclusion...

    To sum it up, ANA Holdings is collecting higher returns from the same amount of capital, and that's impressive. Considering the stock has delivered 34% to its stockholders over the last five years, it may be fair to think that investors aren't fully aware of the promising trends yet. Given that, we'd look further into this stock in case it has more traits that could make it multiply in the long term.

    One final note, you should learn about the 2 warning signs we've spotted with ANA Holdings (including 1 which is a bit unpleasant) .

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