According to Benzinga Pro, during Q2, Ford Motor (NYSE:F) earned $638.00 million, a 120.46% increase from the preceding quarter. Ford Motor also posted a total of $37.91 billion in sales, a 18.06% increase since Q1. Ford Motor collected $32.11 billion in revenue during Q1, but reported earnings showed a $3.12 billion loss.
What Is ROIC?
Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company’s ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Ford Motor posted an ROIC of 1.5%.
Keep in mind, while ROIC is a good measure of a company’s recent performance, it is not a highly reliable predictor of a company’s earnings or sales in the near future.
Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company’s ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q2, Ford Motor posted an ROIC of 1.5%.
Keep in mind, while ROIC is a good measure of a company’s recent performance, it is not a highly reliable predictor of a company’s earnings or sales in the near future.
For Ford Motor, the positive return on invested capital ratio of 1.5% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.
Upcoming Earnings Estimate
Ford Motor reported Q2 earnings per share at $0.68/share, which beat analyst predictions of $0.45/share.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
