Amkor Technology (NASDAQ:AMKR) is catching the eye of investors with its promising trend of Return on Capital Employed (ROCE). This key metric measures the amount of pre-tax profits a company can generate from the capital employed in its business, and for Amkor Technology, it stands at 8.8%.
While this may seem low in absolute terms, it is encouraging to see that the company has been moving in the right direction over the past five years. The returns generated on capital employed have grown considerably, indicating that the business is earning more per dollar of capital invested. Additionally, there has been a 59% increase in the amount of capital employed, suggesting plenty of opportunities for profitable reinvestment.
Furthermore, Amkor Technology has managed to decrease its ratio of current liabilities to total assets to 19%, reducing its reliance on short-term creditors or suppliers for funding. This improvement in ROCE has come from the business’s underlying economics, showcasing a positive trend for the company.
With the stock returning an impressive 428% to shareholders over the last five years, investors are taking notice of Amkor Technology’s potential. While there are still some warning signs to consider, the company’s ability to reinvest in the business and generate higher returns on capital employed is a promising sign for future growth.
As investors continue to monitor Amkor Technology’s performance, the company’s positive ROCE trend is certainly something to keep an eye on.