Return On Capital Employed (ROCE)

What is Return On Capital Employed (ROCE) Return on capital employed (ROCE) is a financial ratio that measures a company’s profitability and the efficiency with which its capital is employed. ROCE is calculated as: ROCE = Earnings Before Interest and Tax (EBIT) / Capital Employed Return On Capital Employed – ROCE Components of Return On […]

Operating Profit

What is ‘Operating Profit’ Operating profit is an accounting figure that measures the profit earned from a company’s ongoing core business operations, thus excluding deductions of interest and taxes. This value also does not include any profit earned from the firm’s investments, such as earnings from firms in which the company has partial interest. Operating […]

Cost of Goods Sold – COGS

What is ‘Cost of Goods Sold – COGS’ Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good. It excludes indirect […]

Operating Income

What is ‘Operating Income’ Operating income is an accounting figure that measures the amount of profit realized from a business’s operations, after deducting operating expenses such as wages, depreciation and cost_of_goods_sold (COGS). Operating income takes a company’s gross income, which is equivalent to total revenue minus COGS, and subtracts all operating expenses. A business’s operating expenses […]