Capital employed refers to the amount of capital investment a business uses to operate and provides an indication of how a company is investing its money. Although capital employed can be defined in different contexts, it generally refers to the capital utilized by the company to generate profits....
In terms of financial analysis, capital employed and equity serve different purposes. Capital employed is often used in ratios (such as the ROCE formula we talked about above). As mentioned in the last paragraph, equity is factored into formulas like return on equity (ROE) that track what val...
Capital employed is the sum of stockholders' equity and long-term finance. Alternatively, capital employed can be calculated as the difference between total assets and current liabilities. The formula to calculate return on capital employed is:...
Many companies may calculate the following key return ratios in their performance analysis: return on equity, return on assets, return on invested capital, and return on capital employed. Formula and Calculation of Return on Capital Employed (ROCE) ...
Return on capital employed formula is calculated by dividing net operating profit or EBIT by the employed capital. If employed capital is not given in a problem or in thefinancial statementnotes, you can calculate it by subtracting current liabilities from total assets. In this case the ROCE for...
Definition Return on capital employed (ROCE) is a measure of the returns that a business is achieving from the capital employed, usually expressed in percentage terms. Capital employed equals a company's Equity plus...
Return on Invested Capital (ROIC)Return on Equity (ROE)Return on Assets (ROA)Return on Investment (ROI)Return on Capital Employed (ROCE)Invested Capital (IC)DuPont AnalysisReturn on Sales (ROS)Equity MultiplierEconomic Profit Capital Allocation Ratios Return on Net Assets (RONA)Return on Ad ...
Return on Invested Capital (ROIC)Return on Equity (ROE)Return on Assets (ROA)Return on Investment (ROI)Return on Capital Employed (ROCE)Invested Capital (IC)DuPont AnalysisReturn on Sales (ROS)Equity MultiplierEconomic Profit Capital Allocation Ratios Return on Net Assets (RONA)Return on Ad ...
Return on average capital employed (ROACE) is a financial ratio that shows profitability versus the investments a company has made in itself.
The formula is: 𝐵𝑖𝑗=∑𝑖=1𝑛𝐼𝑖𝑗𝑊𝑗 Bij=∑i=1nIijWj (5) where Bij is the value of each livelihood capital indicator of the ith farmer, Iij is the normalized value of each livelihood capital indicator of the farmer, and Wj is the weight of each livelihood ...