Return On Capital Employed - ROCE
Definition of 'Return On Capital Employed - ROCE'A ratio that indicates the efficiency and profitability of a company's capital investments.Calculated as: ![]() |
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Investopedia explains 'Return On Capital Employed - ROCE'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. |
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