Calculate Return on Capital Employed to measure how efficiently a company generates profits from its capital investments.
Operating profit before interest and taxes
Use if EBIT not available (optional)
Annual interest payments
Total company assets
Short-term obligations
For equity + debt method (optional)
Return on Capital Employed calculation
Return on Capital Employed measures how efficiently a company generates profits from its capital investments, indicating management effectiveness.
Compare efficiency across similar businesses.
Evaluate potential stock investments.
Monitor business efficiency over time.
Guide capital allocation decisions.