Return on Capital Employed ROCE
Operating profit (EBIT) as a percentage of the long-term capital a company has put to work in its business.
What it is
Return on capital employed measures how efficiently a company generates operating profit from its capital employed, defined as total assets minus current liabilities (or equivalently equity plus long-term debt). It uses pre-tax operating profit (EBIT) rather than after-tax profit, making it a gross, financing-neutral view of capital efficiency. It is especially popular for analyzing capital-intensive industries.
Why it matters
ROCE shows how well a company turns its long-term capital into operating profit, and a consistently high ROCE can indicate durable efficiency and competitive strength. Because it uses EBIT before interest, it allows comparison across companies with different debt situations. A caveat is that, unlike ROIC, ROCE is pre-tax and uses a balance-sheet definition of capital, so it should not be mixed up with the after-tax ROIC when comparing companies.
How it's calculated
Divide operating profit (EBIT) by capital employed, which is total assets minus current liabilities, expressed as a percentage.
How Quintarthai uses it
ROCE and related capital-efficiency ratios are available in the profitability ratios alongside the balance-sheet data on a company's deep-analysis page.