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What are the early trends we should look for to identify a stock that could multiply in value over the long term? Typically, we’ll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it’s a business that is reinvesting profits at increasing rates of return. So on that note, IFCA MSC Berhad (KLSE:IFCAMSC) looks quite promising in regards to its trends of return on capital.

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If you haven’t worked with ROCE before, it measures the ‘return’ (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on IFCA MSC Berhad is:

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

0.14 = RM18m ÷ (RM154m – RM30m) (Based on the trailing twelve months to June 2025).

Thus, IFCA MSC Berhad has an ROCE of 14%. That’s a relatively normal return on capital, and it’s around the 13% generated by the Software industry.

View our latest analysis for IFCA MSC Berhad

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

IFCA MSC Berhad’s ROCE growth is quite impressive. Looking at the data, we can see that even though capital employed in the business has remained relatively flat, the ROCE generated has risen by 5,779% over the last five years. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. The company is doing well in that sense, and it’s worth investigating what the management team has planned for long term growth prospects.

To bring it all together, IFCA MSC Berhad has done well to increase the returns it’s generating from its capital employed. And since the stock has fallen 21% 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.

One more thing, we’ve spotted 3 warning signs facing IFCA MSC Berhad that you might find interesting.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing 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. Having said that, from a first glance at Riverview Rubber Estates Berhad (KLSE:RVIEW) we aren’t jumping out of our chairs at how returns are trending, but let’s have a deeper look.

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For those that aren’t sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Riverview Rubber Estates Berhad is:

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

0.03 = RM12m ÷ (RM405m – RM4.2m) (Based on the trailing twelve months to June 2025).

Thus, Riverview Rubber Estates Berhad has an ROCE of 3.0%. In absolute terms, that’s a low return and it also under-performs the Food industry average of 9.8%.

View our latest analysis for Riverview Rubber Estates 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 Riverview Rubber Estates Berhad’s past further, check out this free graph covering Riverview Rubber Estates Berhad’s past earnings, revenue and cash flow.

In terms of Riverview Rubber Estates Berhad’s historical ROCE trend, it doesn’t exactly demand attention. Over the past five years, ROCE has remained relatively flat at around 3.0% and the business has deployed 32% more capital into its operations. This poor ROCE doesn’t inspire confidence right now, and with the increase in capital employed, it’s evident that the business isn’t deploying the funds into high return investments.

In conclusion, Riverview Rubber Estates Berhad has been investing more capital into the business, but returns on that capital haven’t increased. Since the stock has gained an impressive 44% over the last five years, investors must think there’s better things to come. However, unless these underlying trends turn more positive, we wouldn’t get our hopes up too high.

Riverview Rubber Estates Berhad does come with some risks though, we found 3 warning signs in our investment analysis, and 1 of those is potentially serious…

While Riverview Rubber Estates Berhad isn’t earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.