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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 equity (ROE) which we’ve explained in a previous video. But the problem with ROE is that it doesn’t take a company’s debt into account.

Another metric called return on capital employed (ROCE) does take debt into account, so it’s probably a more useful metric for precisely that reason. In this video, we explain how to calculate ROCE and why it’s useful.

See also:

•  What is return on equity?

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Video tutorial: How to invest in tech stocks

How to invest in technology

The technology sector can be hugely profitable for investors. But how do you pick the right companies? In his latest video, Ed Bowsher explains how to invest in tech stocks.

Shale gas 'fracking' promises to transform Britain's energy market. Find out what it is, what it means, and how to invest.
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