What is return on capital employed?

It’s always important to consider what kind of return a company is generating from its assets. One way to do this is to look at return on capital employed (ROCE). Ed Bowsher explains what ROCE is, how to calculate it, and why it’s useful.

By Ed Bowsher

published 3 December 2013

in Features

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Its always important to consider what kind of return a company is generating from its assets.One way to do this is to look at return on equity (ROE) which weve explained in a previous video. But the problem with ROE is that it doesnt take a companys debt into account.

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What is return on equity?

Ed has been a private investor since the mid-90s and has worked as a financial journalist since 2000. He's been employed by several investment websites including Citywire, breakingviews and The Motley Fool, where he was UK editor.

Ed mainly invests in technology shares, pharmaceuticals and smaller companies. He's also a big fan of investment trusts.

Away from work, Ed is a keen theatre goer and loves all things Canadian.

Follow Ed on Twitter