Calculate Return on Capital Employed (ROCE) for Company X

What is the Return on Capital Employed (ROCE) for Company X?

Based on the provided financial data, how efficient is Company X in generating profits from its capital employed?

Return on Capital Employed (ROCE) Calculation:

The Return on Capital Employed (ROCE) for Company X is 8.75%.

The Return on Capital Employed (ROCE) is a profitability ratio that measures the efficiency of a company in generating profits from its capital employed. To calculate ROCE, we use the formula: Operating Profit / Capital Employed x 100. For Company X, the Operating Profit is $35,000. We can calculate the Capital Employed by subtracting Total Current Liabilities from Total Assets, which is ($200,000 + $300,000) - $100,000 = $400,000. Therefore, the ROCE for Company X is ($35,000 / $400,000) x 100 = 8.75%. This indicates that Company X is utilizing its capital effectively to generate profits.

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