Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. This shows us that it’s a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Although, when we looked at Emergency Assistance Japan (TSE:6063), it didn’t seem to tick all of these boxes.
Return On Capital Employed (ROCE): What Is It?
If you haven’t worked with ROCE before, it measures the ‘return’ (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for Emergency Assistance Japan:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)
0.023 = JPÂ¥42m ÷ (JPÂ¥3.7b – JPÂ¥1.9b) (Based on the trailing twelve months to September 2025).
So, Emergency Assistance Japan has an ROCE of 2.3%. In absolute terms, that’s a low return and it also under-performs the Healthcare industry average of 8.4%.
Check out our latest analysis for Emergency Assistance Japan
TSE:6063 Return on Capital Employed January 20th 2026
Historical performance is a great place to start when researching a stock so above you can see the gauge for Emergency Assistance Japan’s ROCE against it’s prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Emergency Assistance Japan.
What Can We Tell From Emergency Assistance Japan’s ROCE Trend?
When we looked at the ROCE trend at Emergency Assistance Japan, we didn’t gain much confidence. Over the last five years, returns on capital have decreased to 2.3% from 13% five years ago. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run.
On a related note, Emergency Assistance Japan has decreased its current liabilities to 51% of total assets. So we could link some of this to the decrease in ROCE. What’s more, this can reduce some aspects of risk to the business because now the company’s suppliers or short-term creditors are funding less of its operations. Since the business is basically funding more of its operations with it’s own money, you could argue this has made the business less efficient at generating ROCE. Either way, they’re still at a pretty high level, so we’d like to see them fall further if possible.
What We Can Learn From Emergency Assistance Japan’s ROCE
In summary, despite lower returns in the short term, we’re encouraged to see that Emergency Assistance Japan is reinvesting for growth and has higher sales as a result. These trends are starting to be recognized by investors since the stock has delivered a 31% gain to shareholders who’ve held over the last five years. So this stock may still be an appealing investment opportunity, if other fundamentals prove to be sound.
On a final note, we found 4 warning signs for Emergency Assistance Japan (1 can’t be ignored) you should be aware of.
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.
Discover if Emergency Assistance Japan might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.