The return on capital employed or the ROCE as it’s called can be calculated using the following formula:
ROCE= Profit from Operations/Capital Employed where
Capital employed is the total equity plus any long term debt. For the profit from operations some people take the earnings before interest, tax, depreciation and amortization and adjust for other non cash items. Some people even make any adjustment that are necessary to exclude one-off items (such as extraordinary items). It’s also correct to the take the profit from operations.