Calculate Return on Capital Employed (ROCE) instantly and optimize your financial decisions.
ROCE (Return on Capital Employed) is a financial ratio used to evaluate a company's profitability and the efficiency with which its capital is employed. It is calculated by dividing the company's operating profit by the total capital employed.
The formula for calculating ROCE is:
ROCE = Operating Profit / (Total Assets - Total Current Liabilities) * 100
For example, if a company has an operating profit of $50,000, total assets of $300,000, and total liabilities of $50,000, the ROCE would be calculated as:
ROCE = (50,000 / (300,000 - 50,000)) * 100 = 20%
Simply input the operating profit, total assets, and total current liabilities into the calculator above. The ROCE will be calculated instantly without the need to click any buttons. Understanding ROCE helps you evaluate how effectively a company is using its capital to generate profit. A higher ROCE indicates a more efficient use of capital, which is an important indicator of financial health.