What is return on capital employed used for?

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Guest60 0 Comments

Let’s say that I am asked to calculate the return capital employed. Where can I use it and how can I interpret the results?

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score 0 · Answer 1 · 2013-04-21T09:34:29+00:00

The return on capital employed is just one of the so many ratios that can be used to analyze how well a company is doing.

The return on capital employed basically shows what is the after tax operating profit that each dollar (or any currency you want to use) of capital that the company uses bring. In other words, it shows what is the benefit for the business from having all this capital available.