We Like These Underlying Return On Capital Trends At DIGITAL CHOSUN (KOSDAQ:033130)

What are the early trends we should look for to identify a stock that could multiply in value over the long term? 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. Speaking of which, we noticed some great changes in DIGITAL CHOSUN's (KOSDAQ:033130) returns on capital, so let's have a look.

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What Is Return On Capital Employed (ROCE)?

For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for DIGITAL CHOSUN, this is the formula:

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

0.043 = ₩4.1b ÷ (₩105b - ₩8.4b) (Based on the trailing twelve months to September 2025).

Therefore, DIGITAL CHOSUN has an ROCE of 4.3%. Ultimately, that's a low return and it under-performs the Media industry average of 6.8%.

View our latest analysis for DIGITAL CHOSUN

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

How Are Returns Trending?

Even though ROCE is still low in absolute terms, it's good to see it's heading in the right direction. The data shows that returns on capital have increased substantially over the last five years to 4.3%. Basically the business is earning more per dollar of capital invested and in addition to that, 23% more capital is being employed now too. So we're very much inspired by what we're seeing at DIGITAL CHOSUN thanks to its ability to profitably reinvest capital.

Our Take On DIGITAL CHOSUN's ROCE

All in all, it's terrific to see that DIGITAL CHOSUN is reaping the rewards from prior investments and is growing its capital base. Astute investors may have an opportunity here because the stock has declined 38% in the last five years. That being the case, research into the company's current valuation metrics and future prospects seems fitting.

If you want to continue researching DIGITAL CHOSUN, you might be interested to know about the 2 warning signs that our analysis has discovered.

While DIGITAL CHOSUN 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.

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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.