Return on Capital Employed

Profit from all long-term capital.

ROCE measures operating profit against all long-term capital (equity plus debt). It shows how efficiently a company uses every rupee of financing, regardless of whether it came from owners or lenders. ROCE = Operating profit ÷ (Equity + long-term debt) × 100 Operating profit Rs 30 crore, capital employed Rs 200 crore. ROCE = 15%. Ignores financing mix Good cross-company comparison Rewards genuine operating efficiency Needs operating profit, not net Less familiar to beginners Varies by capital intensity

Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: The Ratios.