Return on Capital Employed (RoCE)

Calculate the return on capital employed (ROCE), a profitability ratio that measures the amount of return a company generates from the capital it has invested in the business.

Return on capital employed (ROCE) is a crucial financial metric that evaluates the efficiency and profitability of a company’s utilization of both equity and debt capital to generate profits. It assesses how well the company generates earnings relative to the total capital invested in the business.

The formula is as follows:

Also known as: ROCE.

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Calculate the Return on Capital Employed (RoCE) in Python

The Return on Capital Employed (RoCE) is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_return_on_capital_employed as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

roce_ratios = toolkit.ratios.get_return_on_capital_employed()

Which returns:

Parameters

get_return_on_capital_employed accepts the following parameters:

• rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
• growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
• lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
• standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
• trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.

Related Profitability Ratios

The Ratios module page introduces the module, and the sidebar lists all of its functions.