# How to calculate ROCE?

In this lesson you can learn how to calculate ROCE in Excel.

ROCE stands for return on capital employed. Return of capital employed is one of the most basics measures in the business. ROCE is a profitability indicator which is used to measure the efficiency of the company, regardless of the structure of its assets or extraordinary factors. Return of capital employed should be higher than weighted average cost of capital.

Let's build the return on capital employed calculator in Excel. To calculate ROCE in Excel first you need some data. You need EBIT and Capital Employed.

Copy and paste this roi formula in cell B4: =B2/B3 This formula will calculate the ROCE for data you place in cells B2 and C2 and is based on roi equation formula:

ROCE = EBIT / Capital Employed

alternatively

ROCE = EBIT / (Total Assets - Current Liabilities)

Remember to format ROCE as Percentage. Click B4 cell > click CTRL + 1 keyboard shortcut > click Percentage with 2 decimal places ```Further reading: