Profitability Indicator Ratios: Return On Capital Employed (ROCE)

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Series : Ratio Analysis    (10 th Post)
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This Ratio helps us to understand how profitable a company with in relation to the capital invested.The Ratio ROCE (Return on Capital Employed) ,A Higher ROCE ratio means more efficient use of the capital else its not managing effectively.

The ROCE is expressed as a percentage

Formula:  Return On Capital Employed % = Earnings before Interest and Tax (EBIT) / Capital Employed

Example:

Go to  Moneycontrol.com  Website  here is  an Online Link for the same http://www.moneycontrol.com/financials/relianceindustries/ratios/RI#RI                                       

Select the Ratios under the Financials Tab  & look for the  “Profitability Ratios “

Next Post on Ratio Analysis:  Debt Ratios

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In my quest for learning value investing I came across this interesting article and thought would like to share this with the community.

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