![]() ![]() ![]() ROCE is commonly used for comparing the performance of similar businesses. View our latest analysis for Omnicom Group Is Omnicom Group's ROCE Good? Therefore, Omnicom Group has an ROCE of 20%. Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)Ġ.20 = US$2.1b ÷ (US$25b - US$15b) (Based on the trailing twelve months to March 2019.) So, How Do We Calculate ROCE?Īnalysts use this formula to calculate return on capital employed: Renowned investment researcher Michael Mauboussin has suggested that a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'. In brief, it is a useful tool, but it is not without drawbacks. ![]() In general, businesses with a higher ROCE are usually better quality. ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business. What is Return On Capital Employed (ROCE)? Then we'll determine how its current liabilities are affecting its ROCE. Then we'll compare its ROCE to similar companies. In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business.įirstly, we'll go over how we calculate ROCE. ( NYSE:OMC) to determine whether it could have potential as an investment idea. Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card! ![]()
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