IN PLAIN ENGLISH
A strict efficiency measure. It looks at profit relative to all the capital used in the business. Great for comparing similar companies.
FULL DEFINITION
Return on Capital Employed. Earnings before interest and tax as a share of the capital the business uses (total assets less current liabilities), for the company's latest financial year.
EXAMPLE
Company A has 20% ROCE, Company B has 10%. Company A is getting double the return for every pound put to work.
HOW IT'S CALCULATED
Worked out by the app from the company's latest annual report, not a rolling twelve months: ROCE = EBIT ÷ (total assets − current liabilities), all from the same financial year in the market data provider's annual statements. Shows N/A when there is no EBIT or no current liabilities figure (typical for banks and insurers), or when capital employed is zero or negative.
Educational content only. It is not personal financial advice.