In order to bring you the best possible user experience, this site uses Javascript. If you are seeing this message, it is likely that the Javascript option in your browser is disabled. For optimal viewing of this site, please ensure that Javascript is enabled for your browser.
Login  |   Cloud ERP  |   Home  |   qad.com



  •     QAD Glossary

  • Return on Capital Employed
    The Return on Capital Employed (ROCE) KPI indicates the efficiency and profitability of a company’s capital investments. If the ROCE metric is not higher than the rate at which the company borrows, then any increase in borrowing reduces shareholders’ earnings. A variation of the ROCE metric is the Return on Average Capital Employed (ROACE) metric, which takes the average of opening and closing capital employed for the time period.
    The ROCE metric is calculated as follows:
    ROCE = EBIT / (Total Assets - Current Liabilities)
    Note: The Earnings Before Interest and Taxes (EBIT) metric is an indicator of a company’s profitability, calculated as revenue minus expenses, excluding tax and interest. EBIT, which is also known as Profit Before Interest & Taxes (PBIT), equals net income with interest and taxes. EBIT can also be referred to as operating earnings, operating profit, and operating income, because it equals revenue minus operating expenses.
    Navigation
    The Return on Capital Employed for the Last 12 Months chart is linked to a grid that shows the ROCE details.

    Navigation Overview for the Return on Capital Employed for the Last 12 Months
    Return on Capital Employed for the Last 12 Months Chart
    This chart shows the ROCE metric for the last 12 months for the entity and currency type that you select from the parameter bar.
    Note: The source for this chart is the GL Report Line fact table.

    Return on Capital Employed for the Last 12 Months Chart
    Return on Capital Employed for the Last 12 Months Grid
    This grid, which shows the amounts used to calculate the ROCE ratio, contains the following columns:
    Fin Month
    Fin Month Name
    Formula
    Currency Type
    Entity Code
    Return on Capital Employed ratio
    Total Liabilities
    Total Assets
    EBIT

    Return on Capital Employed for the Last 12 Months Grid