Return on Capital Employed Ratio

Return on Capital Employed Ratio

          This ratio indicates productivity of the capital employed in the  business. Capital employed refers to the total long term fund employed in the business.

Return on capital Employed means operating profit or net profit before deducting interest on long term loans, deposits, debentures and tax. The standard ratio is about 15%.

Return on Capital Employed Ratio = Return on Capital Employed/Capital Employed*100