Jet2's Returns on Capital Employed Soar, Investors Should Take Notice

Jet2's return on capital employed (ROCE) has risen to 16%, significantly higher than the 10% industry average. The company's capital employed has increased by 58% over the last five years, indicating a compounding machine. While the current liabilities to total assets ratio is high at 46%, the overall trend is encouraging.

Jet2's return on capital employed (ROCE) has risen to 16%, significantly higher than the 10% industry average [1]. This robust performance suggests that the company is effectively reinvesting its earnings, a key indicator of a well-managed business.

Over the last five years, Jet2's capital employed has increased by 58%, further highlighting its status as a compounding machine [1]. This growth demonstrates the company's ability to generate substantial returns from its invested capital, a positive sign for future performance.

However, the current liabilities to total assets ratio stands at 46%, which is relatively high [1]. While this ratio indicates a higher level of debt relative to assets, it is important to note that the overall trend is encouraging. The company's ability to manage its debt effectively and generate high ROCE suggests that it is using its capital efficiently.

Investors should closely monitor Jet2's financial health and future prospects, as the company's strong ROCE and capital reinvestment strategy could lead to sustained growth and higher shareholder returns.

References:
[1] https://finance.yahoo.com/news/veem-asx-vee-shareholders-want-000954251.html