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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. Firstly, we’d want to identify a growing return<\/em> on capital employed (ROCE) and then alongside that, an ever-increasing base<\/em> of capital employed. Ultimately, this demonstrates that it’s a business that is reinvesting profits at increasing rates of return. However, after investigating Corus Entertainment<\/strong> (TSE:CJR.B<\/a>), we don’t think it’s current trends fit the mold of a multi-bagger.<\/p>\n This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.<\/a><\/p>\n 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 Corus Entertainment, this is the formula:<\/p>\n Return on Capital Employed = Earnings Before Interest and Tax (EBIT) \u00f7 (Total Assets – Current Liabilities)<\/strong><\/p>\n 0.095 = CA$114m \u00f7 (CA$1.7b – CA$495m) (Based on the trailing twelve months to May 2025)<\/em>.<\/p>\n So, Corus Entertainment has an ROCE of 9.5%. <\/strong> Even though it’s in line with the industry average of 9.9%, it’s still a low return by itself.<\/p>\n See our latest analysis for Corus Entertainment <\/a><\/span><\/p>\n Above you can see how the current ROCE for Corus Entertainment compares to its prior returns on capital, but there’s only so much you can tell from the past. If you’d like to see what analysts are forecasting going forward, you should check out our free analyst report for Corus Entertainment <\/a>.<\/p>\n We’re a bit concerned with the trends, because the business is applying 67% less capital than it was five years ago and returns on that capital have stayed flat. This indicates to us that assets are being sold and thus the business is likely shrinking, which you’ll remember isn’t the typical ingredients for an up-and-coming multi-bagger. Not only that, but the low returns on this capital mentioned earlier would leave most investors unimpressed.<\/p>\n Another point to note, we noticed the company has increased current liabilities over the last five years. This is intriguing because if current liabilities hadn’t increased to 29% of total assets, this reported ROCE would probably be less than9.5% because total capital employed would be higher.The 9.5% ROCE could be even lower if current liabilities weren’t 29% of total assets, because the the formula would show a larger base of total capital employed. So while current liabilities isn’t high right now, keep an eye out in case it increases further, because this can introduce some elements of risk.<\/p>\n<\/p><\/div>\n