OPEN-SOURCE SCRIPT
ROCE with 3-Year EMA
Updated
This Pine Script indicator, "3-Year EMA of Return on Capital Employed (ROCE)," is designed for investors and traders who incorporate both fundamental and technical analysis in their market approach. ROCE is a crucial metric for evaluating the efficiency and profitability of a company's capital employment. Our script enhances this analysis by overlaying a 3-year Exponential Moving Average (EMA) on the ROCE, allowing users to compare current performance against a longer-term trend.
Key Features:
Customization: Users can adjust the EMA length to match the frequency of their data (e.g., 12 for quarterly, 36 for monthly, 156 for weekly data).
Usage Tips:
Disclaimer: This script is provided for informational and educational purposes only and should not be construed as investment advice.
Key Features:
- ROCE Calculation: The script calculates the Return on Capital Employed (ROCE) using EBIT (Earnings Before Interest and Taxes) for the Trailing Twelve Months (TTM) and Capital Employed (Total Assets minus Short Term Debt) for the Fiscal Year (FY). This calculation provides a snapshot of how effectively a company is using its capital to generate profits.
- 3-Year EMA Overlay: The script features a 3-year EMA of the ROCE, providing a smoothed, long-term trend line. This EMA helps in identifying broader trends in a company's operational efficiency and profitability, making it easier to spot deviations from the historical norm.
- Customizable for Different Data Frequencies: Whether your data is quarterly, monthly, or weekly, the script is adaptable. The length of the EMA is adjustable to suit the data frequency, ensuring accurate representation over a 3-year period.
- Visualization: The ROCE and its 3-year EMA are plotted with distinct colors for easy comparison and analysis. This visual representation aids in quickly assessing the company's current performance against its historical trend.
Customization: Users can adjust the EMA length to match the frequency of their data (e.g., 12 for quarterly, 36 for monthly, 156 for weekly data).
Usage Tips:
- Best used on companies with stable and consistent reporting.
- Combine with other fundamental and technical indicators fo
Disclaimer: This script is provided for informational and educational purposes only and should not be construed as investment advice.
Release Notes
**ROCE with Dynamic 3-Year EMA**This Pine Script, titled "ROCE with Dynamic 3-Year EMA," is designed for comprehensive analysis of a company's capital efficiency. It's especially useful for traders and investors integrating both technical and fundamental analysis into their strategies.
**Features**
- **ROCE Calculation**: Calculates the Return on Capital Employed (ROCE) using EBIT (Earnings Before Interest and Taxes) for the Trailing Twelve Months (TTM) and Capital Employed (Total Assets minus Short Term Debt) for the Fiscal Year (FY).
- **Dynamic 3-Year EMA**: Applies a 3-year Exponential Moving Average (EMA) to the ROCE, dynamically adjusting the EMA length to always cover a 3-year period, regardless of the chart’s time interval.
- **Adaptive to Chart's Timeframe**: Adjusts the EMA calculation based on the selected chart interval, ensuring accurate representation over a 3-year period for any timeframe.
- **Visualization**: Plots both the ROCE and its 3-year EMA, providing clear visual cues for analysis.
**Applications**
- **Investment Analysis**: Ideal for evaluating long-term trends in a company’s capital efficiency.
- **Comparative Analysis**: Useful in comparing ROCE trends across different companies or sectors.
- **Strategic Insights**: Assists in making informed decisions by analyzing the consistency of a company's performance.
**Usage Tips**
For optimal use, traders and analysts should consider additional fundamental and technical factors alongside the ROCE and its EMA. It's also important to ensure data consistency and accuracy for the symbols being analyzed.
**Disclaimer**
This script is provided for informational and educational purposes only and should not be construed as investment advice.
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.