---
title: "Definition of ROCE"
url: https://signalscreener.fr/definition/roce/
markdown_url: https://signalscreener.fr/definition/roce.md
description: "A profitability ratio measuring how efficiently a company generates profits from all capital employed in the business."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "ROCE"
  - "Return on Capital Employed"
translations:
  de: https://signalscreener.fr/de/definition/roce.md
  es: https://signalscreener.fr/es/definition/roce.md
  fr: https://signalscreener.fr/fr/definition/roce.md
---

# Return on Capital Employed

## What is ROCE?

A profitability ratio measuring how efficiently a company generates profits from all capital employed in the business.

## Think of it like this

Like measuring the return on everything you've put into a business - both your money and borrowed money.

## Formula

```
ROCE = EBIT ÷ (Total Assets - Current Liabilities) × 100
```

- **EBIT**: Earnings before interest and taxes
- **Capital Employed**: Total Assets - Current Liabilities

## Why it matters

- Measures efficiency of all capital
- Not inflated by debt like ROE
- Useful for capital-intensive businesses
- Should exceed cost of capital

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| < 10% | Poor | Not earning cost of capital |
| 10-15% | Average | Meeting basic returns |
| 15-25% | Good | Creating value |
| > 25% | Excellent | Exceptional capital efficiency |

## Real-world example

Industrial companies with ROCE > 15% are efficiently using their capital base.

---

This is educational content, not financial advice.

Source: [Definition of ROCE](https://signalscreener.fr/definition/roce/) on Signal Screener. Free to quote and cite with attribution and a link to that URL, which is the canonical one.

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