Return On Capital Employed - ROCE
2020-08-14 13:57
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A ratio that indicates the efficiency and profitability of a company's capital investments.Calculated as:
|||ROCE should always be higher than the rate at which the company borrows, otherwise any increase in borrowing will reduce shareholders' earnings.
A variation of this ratio is return on average capital employed (ROACE), which takes the average of opening and closing capital employed for the time period.