The return on capital employed (ROCE) is a profitability metric that measures the company’s ability to generate profits from its investment in assets. It is calculated by dividing the net income for the period by the average invested capital. After that, the answer is expressed as a percentage.

ROCE is a measure of the company’s ability to generate a return on its investment in assets. It is not affected by the size of the company or the industry in which it operates. However, it can be affected by the company’s capital structure and the timing of its investments.

ROCE is a key performance indicator used by investors to assess the overall health of a company. It is also used by analysts to compare companies to each other. ROCE can be a valuable tool for investors to make informed decisions about which companies to invest in.

Here is the formula for calculating ROCE:

ROCE = Net Income / Average Invested Capital x 100%

Net Income is the company’s net income for the period, which is the total amount of money left after all expenses have been paid. Average Invested Capital is the average of the company’s invested capital for the period, which is the total amount of money that the company has invested in assets.