Return on Capital Employed (ROCE)
Profitability relative to capital invested.
Formula
ROCE = Operating Profit / Capital Employed × 100
Real World
In 2023, Tesco reported an operating profit of £2.6bn against capital employed of around £17bn — analysts used ROCE to compare how efficiently Tesco deployed its assets versus rival Sainsbury's.
Exam Focus
Always express ROCE as a percentage and compare it to the cost of borrowing or a competitor's ROCE for evaluation marks.
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