What does ROCE stand for in financial accounting?

Return on Capital Employed (ROCE) is a key financial metric used to evaluate a company's efficiency and profitability relative to the capital employed in its operations. This metric is particularly important because it indicates how well a company is generating profits from its capital. ROCE is calculated by dividing the operating profit (or earnings before interest and tax) by the total capital employed, typically including both equity and debt.

Using ROCE enables stakeholders to assess how effectively a company is using its capital to generate profits, which can be especially useful for comparing performance across different companies or industries. A higher ROCE percentage generally signifies a more efficient use of capital.

The other choices provided either do not represent standard accounting terminology or refer to concepts that do not relate directly to measuring profitability in relation to capital. Therefore, Return on Capital Employed is the most relevant and widely used definition in the context of financial accounting.