Accountancy, asked by lamak1927, 1 year ago

Explain the meaning and computing procedure of return on capital employed.

Answers

Answered by prashanth1551
0
Return on capital employed is an accounting ratio used in finance, valuation, and accounting. It is a useful measure for comparing the relative profitability of companies after taking into account the amount of capital used.[1]

The formulaEdit

{\displaystyle {\mbox{ROCE}}={\frac {\mbox{Earning Before Interest and Tax (EBIT)}}{\mbox{Capital Employed}}}}
(Expressed as a %)
It is similar to return on assets (ROA), but takes into account sources of financing

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