See the third quarter Now serving (New York Stock Exchange code: NOW) Revenue was $69.33 million, an increase of 11.35% over the previous quarter. ServiceNow also announced a total of $1.15 billion in sales, an increase of 7.56% since the second quarter. ServiceNow’s revenue in the second quarter was $62.27 million, with sales totaling $1.07 billion.
Why is ROCE so important
Changes in revenue and sales indicate that ServiceNow’s return on capital used has changed. ServiceNow’s return on capital used is a measure of the annual pre-tax profit relative to the capital used by the enterprise. Generally, a higher ROCE indicates that the company has successfully grown and indicates higher future earnings per share. In the third quarter, ServiceNow’s ROCE was 0.03%.
It is important to remember that ROCE assesses past performance and cannot be used as a predictive tool. This is a good indicator of the company’s recent performance, but there are several factors that may affect earnings and sales in the near future.
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When comparing companies engaged in the same industry, the return on capital used is an important indicator of efficiency and a useful tool. A higher ROCE indicates that the company may generate profits, which can be reinvested into more capital, resulting in higher returns and increasing shareholder earnings per share.
As far as ServiceNow is concerned, investors should pay attention to a positive ROCE ratio before making long-term financial decisions.
Third quarter earnings review
ServiceNow announced third-quarter earnings per share of $1.21, higher than analysts’ expectations of $1.03.
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