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Wednesday, April 20, 2011

Return on Capital Employed (ROCE) Ratio

Definition: Return on Capital Employed (ROCE) is a financial ratio used to measure the profitability of a firm. It indicates the efficiency of the capital utilized to generate earnings. ROCE is also known as "Return on capital invested" or "Percentage return on capital".

Formula:
Return on Capital Employed = (Profit before interest/Capital employed) * 100%
Or,
ROCE = (Profit before interest and

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