To find a multi-bagger stock, what are the underlying trends we should look for in a business? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Ultimately, this demonstrates that it’s a business that is reinvesting profits at increasing rates of return. Speaking of which, we noticed some great changes in Acushnet Holdings’ (NYSE:GOLF) returns on capital, so let’s have a look.
What Is 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. To calculate this metric for Acushnet Holdings, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)
0.16 = US$298m ÷ (US$2.4b – US$515m) (Based on the trailing twelve months to June 2025).
Thus, Acushnet Holdings has an ROCE of 16%. In absolute terms, that’s a satisfactory return, but compared to the Leisure industry average of 7.9% it’s much better.
View our latest analysis for Acushnet Holdings
NYSE:GOLF Return on Capital Employed September 13th 2025
Above you can see how the current ROCE for Acushnet Holdings compares to its prior returns on capital, but there’s only so much you can tell from the past. If you’d like, you can check out the forecasts from the analysts covering Acushnet Holdings for free.
The Trend Of ROCE
We like the trends that we’re seeing from Acushnet Holdings. Over the last five years, returns on capital employed have risen substantially to 16%. The amount of capital employed has increased too, by 31%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that’s why we’re impressed.
The Bottom Line
All in all, it’s terrific to see that Acushnet Holdings is reaping the rewards from prior investments and is growing its capital base. Since the stock has returned a staggering 142% 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.
One more thing: We’ve identified 3 warning signs with Acushnet Holdings (at least 2 which don’t sit too well with us) , and understanding them would certainly be useful.
While Acushnet Holdings may not currently earn the highest returns, we’ve compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.
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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.