Return on Capital Employed (ROCE)
Business: Cambridge International GCSE (2027 Exams), topic 5.5.8
Return on Capital Employed (ROCE)
Return on capital employed is the profit a company receives from capital used.
ROCE
- ROCE = (Operating profit ÷ Capital employed) × 100
Purpose of ROCE
- This is a useful measure for understanding the total resources a business can use. The higher percentage, the better.
Test yourself on Return on Capital Employed (ROCE)
A company's operating profit is £245,000. The capital it employed is £230,000. What is the ROCE (to 2 decimal places)?
A company has an operating profit of £87,000. The capital it employed is £90,000. What is the ROCE (to 2 decimal places)?