Businessmate Site Logo

Home - About - Advertise

Date: 2018-10-17
Search Articles by topic

Mangement and Leadership

Production Management

Business Strategy



Human Resource Management

Organizational Theory & Design

National and Organizational Culture

Important Business Terms


Article Search
Search Title & Content:
Search Author:

Custom Search






Return on Capital Employed (ROCE)

Recommend this article to your friends!

Return on capital employed (ROCE) tries to measure the profitability and efficiency of investments.


The formula:


ROCE = EBIT / (Total Assets - Current Liabilities)


This measure thus tries to reveal the profitability of assets currently at hand. It says something about how effectively and efficiently a company uses its assets to generate revenue and income.

ROCE should always be higher than the rate of borrowing in e.g. banks. Otherwise, any new borrowing of the company would reduce shareholders' profit.


Investors might be compelled to invest in companies that show a high ROCE, because this might signal that the company is able to generate great profits from the assets currently at the disposal of the company.

Date Created: 2009-11-12
Posted by: Admin
Return on Capital Employed (ROCE)

Related resources:

Return on Investment (ROI)
Return on Assets (ROA)
Return on Equity (ROE)
Return on Sales (ROS)
Contribution Margin and Contribution Margin Ratio

Online MBA, Online MBA Courses, Return on Capital Employed, ROCE, example, formula, calculation


Advertise on


Copyright © BusinessMate 2009-2014

Home - About - Terms of Use - Contact - Sitemap - Privacy Policy