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
Responsible AI: Why Privacy Is An Essential Element
Today, people often talk about “responsible” AI use, but what do they really mean?[...]
The Amazing Ways IKEA Is Using Generative AI
Global furniture retailer IKEA has long been at the forefront of tech-driven retail innovation.[...]
Generative AI Is Coming To Your Home Appliances
Across all industries, organizations are rapidly embracing generative AI. Among them, makers of home appliances like fridges and ovens.[...]
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.[...]
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