Explore MMS Ventures Berhad’s Fair Values from the Community and select yours
When we’re researching a company, it’s sometimes hard to find the warning signs, but there are some financial metrics that can help spot trouble early. A business that’s potentially in decline often shows two trends, a return on capital employed (ROCE) that’s declining, and a base of capital employed that’s also declining. Trends like this ultimately mean the business is reducing its investments and also earning less on what it has invested. And from a first read, things don’t look too good at MMS Ventures Berhad (KLSE:MMSV), so let’s see why.
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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. To calculate this metric for MMS Ventures Berhad, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)
0.0081 = RM539k ÷ (RM79m – RM12m) (Based on the trailing twelve months to June 2025).
So, MMS Ventures Berhad has an ROCE of 0.8%. In absolute terms, that’s a low return and it also under-performs the Machinery industry average of 7.7%.
Check out our latest analysis for MMS Ventures Berhad
While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you’re interested in investigating MMS Ventures Berhad’s past further, check out this free graph covering MMS Ventures Berhad’s past earnings, revenue and cash flow.
We are a bit worried about the trend of returns on capital at MMS Ventures Berhad. Unfortunately the returns on capital have diminished from the 7.1% that they were earning five years ago. Meanwhile, capital employed in the business has stayed roughly the flat over the period. This combination can be indicative of a mature business that still has areas to deploy capital, but the returns received aren’t as high due potentially to new competition or smaller margins. If these trends continue, we wouldn’t expect MMS Ventures Berhad to turn into a multi-bagger.
On a side note, MMS Ventures Berhad’s current liabilities have increased over the last five years to 15% of total assets, effectively distorting the ROCE to some degree. Without this increase, it’s likely that ROCE would be even lower than 0.8%. Keep an eye on this ratio, because the business could encounter some new risks if this metric gets too high.