Return on Capital Employeed (ROCE)
Return on capital employed (ROCE) is a financial ratio that measures a company's profitability and the efficiency with which its capital is employed.
A higher ROCE indicates a more efficient use of capital. ROCE should be higher than the company’s capital cost; otherwise it indicates that the company is not employing its capital effectively and is not generating shareholder value.
Calculated as: (EBIT / Total Assets - Current Liabilities) x 100