Track 3: Capital Allocation & Moats
schedule 8 Min Read
ROCE vs ROE: The True Test of Capital Efficiency & Leverage Traps
Chapter 4: How financial engineering can inflate Return on Equity while Return on Capital Employed reveals the underlying business economics.
ROCE Formula
EBIT / Capital Employed
ROE Formula
Net Profit / Shareholder Equity
Ideal ROCE Spread
> 15% (or WACC + 5%)
Read Full Forensic Audit
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Statutory MCA-21 Cross-Audited