Capital employed
Fundamental analysisThe total capital used by a business or segment to generate its returns.
In plain terms
Segment result divided by segment capital employed usually reveals which division the company really is.
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Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Return on capital employed
AccountingAlso called: ROCE
Operating profit divided by the capital invested in the business.
In plain terms
Recalculate it including capital work in progress. If most of the return disappears, the distortion was doing the work.
ROCE
Fundamental analysisReturn on capital employed — operating profit as a percentage of debt plus equity.
In plain terms
The honest version of ROE. It cannot be manufactured with leverage.