ROCE
2 July 2021
ROCE stands for Return on Capital Employed and is a measure of the return a company generates from the capital invested in the business. The measure basically compares earnings with the capital employed to provide an insight into how well a business has used its capital investments to generate income.
ROCE uses the reported (period end) capital numbers. A variation of this metric is Return on Average Capital Employed (ROACE) which uses the average of the opening and closing capital for the period.
ROCE = EBIT / Total capital employed
This indicator is included in the book: Key Performance Indicators – the 75+ measures every manager needs to know, which contains an in-depth description of this KPI, as well as practical advice on data collection, calculations, target setting, and actual usage.
Related Articles
Generative AI And The Risk Of Inbreeding
We all understand the concept of inbreeding in human terms – where people who are too genetically similar reproduce, resulting in offspring with deformities.[...]
How Generative AI Will Change The Jobs Of HR Professionals
HR is fundamentally about managing humans – so how will the job change in a future where powerful generative AI tools are everywhere?[...]
Amazon Harnesses Generative AI For Seamless Palm Recognition Shopping Experience
Generative AI may have made headlines for its ability to write text and create art, but its uses extend beyond simply generating content.[...]
What Every CEO Needs To Know About The New AI Act
Having recently passed the Artificial Intelligence Act, the European Union is about to bring into force some of the world’s toughest AI regulations.[...]
How Generative AI Will Change The Jobs Of Journalists
You could be forgiven for thinking that journalists, like others who make their living from writing, would be among those most in danger of being made redundant by generative AI.[...]
The Best Generative AI Tools Transforming Education
Whether you’re a schoolteacher or university student, a workplace upskiller or a lifelong learner, there are generative AI tools you can use to make education more accessible, efficient and affordable.[...]
Sign up to Stay in Touch!
Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity.
He is a best-selling author of over 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations.
He has a combined following of 4 million people across his social media channels and newsletters and was ranked by LinkedIn as one of the top 5 business influencers in the world.
Bernard’s latest book is ‘Generative AI in Practice’.
Social Media