Return on Capital Employed or ROCE
is a ratio that indicates the efficiency and profitability of a company's
capital investments.
In other words the ROCE ratio is an
indicator of how well a company is utilizing capital to generate revenue.
ROCE should normally be higher than the
rate that the company borrows at, otherwise any increase in borrowings
will reduce shareholders' earnings.
The calculation of Return on Capital
Employed is done by taking profit before interest and tax (EBIT) and dividing
that by the difference between total assets and current liabilities.
Book: Steven M. Bragg  Business Ratios and Formulas : A Comprehensive
Guide 
Book: Ciaran Walsh  Key Management Ratios 
Compare also: Current Ratio 
Cash Ratio 
ROIC 
Discounted Cash Flow 
Free Cash Flow 
Economic Value Added 
CFROI
More management models
