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Return on Capital Employed (ROCE): the Return on Capital Employed is given by the ratio NOPAT/Capital Employed, where NOPAT stands for the Net Operating Profit After Tax (= EBIT*(1-T_C), where T_C is the normative corporate tax rate) and Capital Employed = Fixed Assets + Working Capital = Equity + Net Debt (only book values are considered).
The ROCE measures the ability of the company’s assets to generate operating profits, independently of its financial structure. These operating profits will then be attributed to shareholders, debtholders and … the government (under the form of corporate taxes).