Measures a company’s profitability relative to its capital employed.

What it Measures ?

How well are we using our capital to generate profit?

Relevant StakeHolders 

CFO, Investors

In-depth Use Case / Real-world Example

ROCE is calculated by dividing EBIT by the total capital employed. For example, if a company’s EBIT is ₹200,000 and the capital employed is ₹1,000,000, the ROCE is 20%. This metric shows how efficiently a company is using its capital to generate profit. A higher ROCE indicates better utilization of capital and efficient management of assets. It is widely used to compare companies in capital-intensive industries to evaluate how well each uses its capital to generate earnings.