Formula of ROCE

ROCE is an accounting term which is used to know about profitability of a company with respect to investment done by the company. Full form of ROCE is return on capital employed, given below is the ROCE formula –

Profit after tax/Capital Employed

In order to see calculation of capital employed one can see this post. Since this ratio takes into account debt of the company it is considered to be more accurate depiction of company’s profitability position.

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