If you're looking for a multi-bagger, there's a few things to keep an eye out for. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So on that note, Mayu Global Group Berhad (KLSE:MAYU) looks quite promising in regards to its trends of return on capital.

Return On Capital Employed (ROCE): What Is It?

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. The formula for this calculation on Mayu Global Group Berhad is:

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

0.017 = RM6.7m ÷ (RM434m - RM36m) (Based on the trailing twelve months to March 2023).

So, Mayu Global Group Berhad has an ROCE of 1.7%. In absolute terms, that's a low return and it also under-performs the Metals and Mining industry average of 9.0%.

Check out our latest analysis for Mayu Global Group Berhad

Historical performance is a great place to start when researching a stock so above you can see the gauge for Mayu Global Group Berhad's ROCE against it's prior returns. If you want to delve into the historical earnings, revenue and cash flow of Mayu Global Group Berhad, check out these free graphs here.

The Trend Of ROCE

While the ROCE isn't as high as some other companies out there, it's great to see it's on the up. More specifically, while the company has kept capital employed relatively flat over the last five years, the ROCE has climbed 81% in that same time. So it's likely that the business is now reaping the full benefits of its past investments, since the capital employed hasn't changed considerably. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward.

Our Take On Mayu Global Group Berhad's ROCE

To bring it all together, Mayu Global Group Berhad has done well to increase the returns it's generating from its capital employed. And since the stock has fallen 68% over the last five years, there might be an opportunity here. That being the case, research into the company's current valuation metrics and future prospects seems fitting.

Mayu Global Group Berhad does come with some risks though, we found 5 warning signs in our investment analysis, and 2 of those shouldn't be ignored...