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What is Return on Capital Employed?

Capital Employed Return
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What is Return on Capital Employed?

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ROCE is a ratio which indicates the efficiency and profitability of the capital investments of a company. In other words: the ROCE ratio is an indicator of how well a company is utilizing capital to generate revenue. ROCE should normally be higher than the borrowing rate from the company, otherwise any increase in borrowings will reduce shareholders’ earnings.

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