What is 'return on capital employed' in SAP ORG-LX-T9N - Team: Corporate Translation?

return on capital employed - Overview

• Component: ORG-LX-T9N

• Component Name: Team: Corporate Translation

• Description: A profitability ratio that measures how efficiently a company is using its capital to generate profits.

return on capital employed - Details

• 
  Key Concepts: 
  Return on capital employed (ROCE) is a financial ratio that measures the profitability of a company in relation to the capital it has employed. It is calculated by dividing the company’s operating profit by its total capital employed. ROCE is used to measure how efficiently a company is using its capital to generate profits. 
  
  How to use it: 
  ROCE can be used to compare the performance of different companies in the same industry, or to compare the performance of a single company over time. It can also be used to assess the effectiveness of management decisions and strategies. 
  
  Tips & Tricks: 
  When comparing companies, it is important to consider other factors such as debt levels and asset turnover. A high ROCE may indicate that a company is using its capital efficiently, but it may also be due to low levels of debt or high asset turnover. 
  
  Related Information: 
  ROCE is closely related to other financial ratios such as return on assets (ROA) and return on equity (ROE). ROA measures the profitability of a company in relation to its total assets, while ROE measures the profitability of a company in relation to its shareholders’ equity.