A high return on capital employed is a validation of a company’s competitive advantage and tends to be an attribute of growth companies.

The first column shows the return on capital employed, based on the last annual report, and the second column shows the trend over the last five years. Be concerned if it is declining rapidly.

The prospective PER, five-year historic growth rate, prospective growth rate and prospective PEG (if applicable) are also clearly of interest.

The final column has been allocated to margin, which will, in most cases, be substantial. Companies with a high return on capital usually generate a high return on sales.