If you're looking for a multi-bagger, there's a few things to keep an eye out for. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So, when we ran our eye over Bijou Brigitte modische Accessoires' (ETR:BIJ) trend of ROCE, we liked what we saw.

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. To calculate this metric for Bijou Brigitte modische Accessoires, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.12 = €41m ÷ (€407m - €72m) (Based on the trailing twelve months to December 2023).

Thus, Bijou Brigitte modische Accessoires has an ROCE of 12%. That's a pretty standard return and it's in line with the industry average of 12%.

See our latest analysis for Bijou Brigitte modische Accessoires

Historical performance is a great place to start when researching a stock so above you can see the gauge for Bijou Brigitte modische Accessoires' ROCE against it's prior returns. If you're interested in investigating Bijou Brigitte modische Accessoires' past further, check out this free graph covering Bijou Brigitte modische Accessoires' past earnings, revenue and cash flow.

How Are Returns Trending?

The trend of ROCE doesn't stand out much, but returns on a whole are decent. The company has consistently earned 12% for the last five years, and the capital employed within the business has risen 40% in that time. Since 12% is a moderate ROCE though, it's good to see a business can continue to reinvest at these decent rates of return. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns.

Our Take On Bijou Brigitte modische Accessoires' ROCE

To sum it up, Bijou Brigitte modische Accessoires has simply been reinvesting capital steadily, at those decent rates of return. However, over the last five years, the stock has only delivered a 11% return to shareholders who held over that period. So to determine if Bijou Brigitte modische Accessoires is a multi-bagger going forward, we'd suggest digging deeper into the company's other fundamentals.

On a final note, we've found 2 warning signs for Bijou Brigitte modische Accessoires that we think you should be aware of.