Return on Capital Employed Calculator (ROCE)

Your details

Both methods produce the same capital employed figure from a balanced balance sheet. Choose whichever data you have to hand.
Earnings Before Interest and Taxes - operating profit from the income statement before financing costs and tax.
USD
All assets on the balance sheet: current assets plus non-current assets.
USD
Obligations due within 12 months - trade payables, short-term debt, accruals, etc.
USD
Effective corporate tax rate used to compute Net Operating Profit After Tax (NOPAT). Leave at 21% for a US federal baseline.
%
Weighted Average Cost of Capital. ROCE above WACC signals the company creates value; below WACC destroys it. Leave blank (0) to skip.
%
ROCEGood
15.38%

Return on Capital Employed - EBIT as a percentage of capital employed

Capital employed32,500,000USD
NOPAT3,950,000USD
ROCE after tax0.12%
Spread vs. WACC0.07%
15.38% %
Very low<5%Below avg5%-10%Average10%-15%Good15%-25%Excellent25%+

ROCE is 15.38% - good capital efficiency.

  • Your ROCE of 15.38% is good - for every $1 of capital deployed, the business earns $0.1538 in operating profit.
  • After applying your 21.0% tax rate, NOPAT is $3,950,000, giving an after-tax ROCE of 12.15%.
  • ROCE (15.38%) exceeds WACC (8%), meaning the business is creating economic value - each dollar invested earns more than the cost of that capital.
  • Capital employed is $32,500,000. To lift ROCE by 1 percentage point without adding capital, EBIT would need to increase by $325,000.

Next stepCompare your ROCE against sector peers and your own WACC. A sustained ROCE above WACC over several periods is the strongest signal that management is creating shareholder value.

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