Return on capital employed calculator

To calculate the return on capital employed (ROCE), you’ll need two pieces of information: the operating profit and the capital employed.

Page written by AI. Reviewed internally on June 25, 2024.

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Capital employed

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Return on capital employed

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Why calculate ROCE?

The formulas to calculate ROCE using total assets or equity

ROCE stands for return on capital employed. It is a financial ratio that measures the profitability and efficiency of a company’s capital investments. ROCE indicates how well a company is generating profits from its invested capital.

ROCE is used as a performance metric by investors, analysts, and managers to assess a company’s profitability and the efficiency with which it utilises its capital. A higher ROCE indicates that the company is generating more profits relative to the capital invested, which is generally considered favourable.

It’s important to note that ROCE can vary across industries, so it is often more meaningful to compare a company’s ROCE to its industry peers to get a better understanding of its performance.

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