While iHeartMedia isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. On a final note, we found 2 warning signs for iHeartMedia (1 is significant) you should be aware of. In absolute terms, that's a low return and it also under-performs the Media industry average of 9.4%.Ĭheck out our latest analysis for iHeartMedia Therefore, iHeartMedia has an ROCE of 5.2%. Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)Ġ.052 = US$392m ÷ (US$8.3b - US$832m) (Based on the trailing twelve months to December 2022). Analysts use this formula to calculate it for iHeartMedia: Understanding Return On Capital Employed (ROCE)įor 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.
So after we looked into iHeartMedia ( NASDAQ:IHRT), the trends above didn't look too great. This combination can tell you that not only is the company investing less, it's earning less on what it does invest. 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. To avoid investing in a business that's in decline, there's a few financial metrics that can provide early indications of aging.
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