Which of the following is a key component used to calculate ROCE?

Return on Capital Employed (ROCE) is a financial metric that assesses a company's efficiency at generating profits from its capital. The formula for ROCE is:

ROCE = (Net Profit / Capital Employed) x 100

In this formula, net profit is a crucial element, as it represents the company's earnings after all expenses have been deducted. This figure allows analysts and investors to understand how effectively the company is turning capital into profit.

Capital employed, typically calculated as total assets minus current liabilities, can also highlight how much of the firm's resources are at work in generating profit. However, since the question specifically asks for a key component used to calculate ROCE, net profit is the primary figure required to complete this calculation.

While total liabilities, shareholder equity, and current assets are important financial metrics, they do not directly factor into the simple calculation of ROCE as net profit does, making net profit the focus in this context.