Equatorial Pará Distribuidora de Energia (BVMF:EQPA3) Is Looking To Continue Growing Its Returns On Capital

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Speaking of which, we noticed some great changes in Equatorial Pará Distribuidora de Energia's (BVMF:EQPA3) returns on capital, so let's have a look.This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Understanding Return On Capital Employed (ROCE) 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 Equatorial Pará Distribuidora de Energia is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.15 = R$2.4b ÷ (R$22b - R$6.2b) (Based on the trailing twelve months to September 2025). Thus, Equatorial Pará Distribuidora de Energia has an ROCE of 15%. In absolute terms, that's a satisfactory return, but compared to the Electric Utilities industry average of 12% it's much better. Check out our latest analysis for Equatorial Pará Distribuidora de Energia BOVESPA:EQPA3 Return on Capital Employed January 20th 2026 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'd like to look at how Equatorial Pará Distribuidora de Energia has performed in the past in other metrics, you can view this free graph of Equatorial Pará Distribuidora de Energia's past earnings, revenue and cash flow. What The Trend Of ROCE Can Tell Us Investors would be pleased with what's happening at Equatorial Pará Distribuidora de Energia. Over the last five years, returns on capital employed have risen substantially to 15%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 52%. So we're very much inspired by what we're seeing at Equatorial Pará Distribuidora de Energia thanks to its ability to profitably reinvest capital. For the record though, there was a noticeable increase in the company's current liabilities over the period, so we would attribute some of the ROCE growth to that. Effectively this means that suppliers or short-term creditors are now funding 28% of the business, which is more than it was five years ago. It's worth keeping an eye on this because as the percentage of current liabilities to total assets increases, some aspects of risk also increase. In Conclusion... To sum it up, Equatorial Pará Distribuidora de Energia has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. Since the stock has returned a staggering 175% to shareholders over the last five years, it looks like investors are recognizing these changes. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence. If you want to continue researching Equatorial Pará Distribuidora de Energia, you might be interested to know about the 3 warning signs that our analysis has discovered. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity.