Six things every investor should know about return on capital employed (ROCE)

Return on capital employed (ROCE) is a key ratio that can reveal lots of useful information about a firm. In this short guide, Tim Bennett explains how it works, when it is most useful and when it can let you down.

[@prateekamarnani2974]

You Sir,have been the source where I learned this, not my college .Thanks .

[@jordanhuusy]

great job on the videos, I always look forward for a new one to come out. Keep up the great work!

[@whitiewhiteman2118]

0,2x0,5x100=10 thx for sharing your knowledge and spending your time with and for people. very enjoyable voice, nice and clear thoughts and much easier to understand as in german, for example. regards from vienna

[@peterbradshaw8018]

This reminds me of A level Accounting I taught myself and I had to memorise a whole load of ratios.

[@ramenisgood4u]

Thanks for another great video !

[@heljemelts2299]

This is brilliant, thank you so much

[@gajendrakc813]

4:08 Is ROCE the measure of how much return is the investor going to make if they invest their money in some entity? Return might be different for debt or equity investors irrespective of the ROCE isn't it?

[@sagheerahmed6500]

Tim have you done a video on UITs ( Unit Investment Trusts)?

[@NicosMind]

When are you going to do more about DuPont analysis?

[@Azhark94]

Can you do financial ratio analysis, Why it declines and why it rises. Thanks

[@leonidasspartan9842]

Thank you

[@trishanjitpoem8254]

Xclnt. I watch ur every vdo nd learn a lot. I m from India.

[@luqmanhrizal]

What about they spend half of net income in dividend? Should be the roce cut half?

[@arashrf]

Shouldn't we subtract current liabilities from the sum of Equities and debt? In other words is there a difference between ROCE and ROA?

[@Ezinma88]

I was just wondering the same thing. Did you ever find an answer?

[@zinturis]

I guess it means DEBT + EQUITY is (10) + 90 = 100. No matter whether the capital was borowed or has come from shareholderrs, it's still the capital employed - you use it to make money.

[@AsenaDirican]

what about ROIC?

[@FullMoonHatch]

If your looking at the ROCE over a 10 year project, would you use the averages over the 10 years in the calculations?

[@loveanimals-0197]

You could, just to get a feel of whether ROCE has been growing, I think. Other than that, averaging it doesn't make much sense over a long term, in my opinion. Someone correct me if I am wrong.

[@sandboteable]

Oh. I thought this was for Remote Direct Memory Access.

[@westnash]

Almost impossible to find a good book on ROCE. Why is that?

[@loveanimals-0197]

Where would you get the "sales" number you talk about?

[@rigrag7876]

The start of the Profit and Loss account

[@grayfilms5451]

This is Return on Assets (ROA), not Return on Capital Employed (ROCE)

[@sivakumarkandasamy8828]

Good

[@juliensteel6993]

Can you do a video on how and why companies buy their own stocks? Like Apple will do. Thanks

[@bighands69]

There are numerous reasons why companies buy back such as they may have excess cash, want more control or want to try and control the price of shares.

[@Snowy123]

nice shirt

[@Faiman1000]

He he Oh well at least summers here all 12 hours of it! :P

[@marie-franceniamke938]

Tchrrrr

[@olivierd.5098]

Hahaha ! any ratio used on its own is useless my friend 😂. You obviously have to look it into perspective of other ratios and this is one of the best to focus on as it encapsulates a lot of the business characteristics