Telefonaktiebolaget L M Ericsson (OHEL:ERIBR) ROCE % : 10.97% (As of Mar. 2024)

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What is Telefonaktiebolaget L M Ericsson ROCE %?

ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Telefonaktiebolaget L M Ericsson's annualized ROCE % for the quarter that ended in Mar. 2024 was 10.97%.

Telefonaktiebolaget L M Ericsson ROCE % Historical Data

The historical data trend for Telefonaktiebolaget L M Ericsson's ROCE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Telefonaktiebolaget L M Ericsson ROCE % Chart

Telefonaktiebolaget L M Ericsson Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROCE %

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6.57

18.48

18.06

13.36

-10.69

Telefonaktiebolaget L M Ericsson Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROCE %	Get a 7-Day Free Trial															6.00	0.43	-63.86	13.40	10.97

Telefonaktiebolaget L M Ericsson ROCE % Calculation

Telefonaktiebolaget L M Ericsson's annualized ROCE % for the fiscal year that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	-1792.949	/	( ( (31794.462 - 13245.835)	+	(26554.166 - 11567.899) )	/ 2 )
	=	-1792.949	/	( (18548.627	+	14986.267)	/ 2 )
	=	-1792.949	/	16767.447
	=	-10.69 %

Telefonaktiebolaget L M Ericsson's ROCE % of for the quarter that ended in Mar. 2024 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Mar. 2024 )		(Q: Dec. 2023 )		(Q: Mar. 2024 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Mar. 2024 )		(Q: Dec. 2023 )		(Q: Mar. 2024 )
	=	1671.168	/	( ( (26554.166 - 11567.899)	+	(26467.507 - 10983.658) )	/ 2 )
	=	1671.168	/	( ( 14986.267	+	15483.849 )	/ 2 )
	=	1671.168	/	15235.058
	=	10.97 %

(1) Note: The EBIT data used here is four times the quarterly (Mar. 2024) EBIT data.

Telefonaktiebolaget L M Ericsson (OHEL:ERIBR) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

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Telefonaktiebolaget L M Ericsson (OHEL:ERIBR) Business Description

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Address

Torshamnsgatan 21, Kista, Stockholm, SWE, SE-164 83

Website

https://www.ericsson.com

Ericsson provides telecom equipment and services that are primarily used to build and facilitate mobile networks through operations in three segments: networks, cloud and software services, and enterprises. The firm's customers have historically been primarily wireless carriers, but the firm is making a push to cater more to other enterprises as well, both as they try to take advantage of 5G capabilities and on other "as-a-service" communications platforms. The company also licenses its patents to handset manufacturers so their devices are compatible with wireless networks.

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