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ROCE :stands for Return on Capital Employed, which is a financial ratio used to assess the profitability and efficiency of a company's capital investments.
It measures the return a company generates from the capital employed in its operations.
#learning #roce
It measures the return a company generates from the capital employed in its operations.
#learning #roce
ROCE is calculated by dividing a company's earnings before interest and taxes (EBIT) by its capital employed, which includes both equity and debt. It is expressed as a percentage.
A higher ROCE indicates better profitability and efficiency in utilizing capital, while a lower ROCE suggests lower profitability or inefficiency.
ROCE is used to compare the performance of different companies or industry peers. It allows investors and analysts to evaluate how a company's ROCE compares to others in the same sector. It helps identify companies that are more efficient in generating returns on capital .
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