ROCE — Return On Capital Employed
Definition: EBIT divided by capital employed (equity + debt). ROCE is favored in capital-intensive industries where ROE distortions from leverage hide the real operating story.
Example
In board meetings, you'll often hear something like: "Let's pull the latest ROCE numbers before we make a call" — shorthand for return on capital employed.
When you'll hear it
ROCE shows up most often in board meetings, quarterly business reviews, and strategy off-sites. When someone uses it, they're usually referring to return on capital employed — and they expect the room to already know what that means.
FAQs
What does ROCE stand for?
ROCE stands for Return On Capital Employed.
What does ROCE mean in business and finance?
EBIT divided by capital employed (equity + debt). ROCE is favored in capital-intensive industries where ROE distortions from leverage hide the real operating story.
Where will I hear ROCE used at work?
ROCE comes up most often in board meetings, quarterly business reviews, and strategy off-sites. It's used as shorthand for return on capital employed, so people assume you already know the term.