Return On Capital Employed - ROCE

Filed Under » Acronyms

	Definition of 'Return On Capital Employed - ROCE' A ratio that indicates the efficiency and profitability of a company's capital investments. Calculated as:
	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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