To calculate this metric for Great Lakes Dredge & Dock, this is the formula: Understanding Return On Capital Employed (ROCE)įor 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. So on that note, Great Lakes Dredge & Dock ( NASDAQ:GLDD) looks quite promising in regards to its trends of return on capital. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics.
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