Return on Capital Employed (ROCE) is a vital financial metric that assesses how efficiently a company utilizes its capital to generate profits. ROCE helps investors and analysts understand the effectiveness of capital allocation within a business.nnTo calculate ROCE, you use a simple formula: Net Operating Profit divided by Employed Capital. This calculation provides a clear picture of how well a company is performing in terms of generating returns from the capital invested in its operations.nnBy analyzing ROCE, stakeholders gain valuable insights into the company's profitability and efficiency in utilizing its resources. ROCE indicates the company's ability to generate profits relative to the total capital employed in its operations.