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