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Capital Employed
Capital Employed represents the total capital investment used to generate profits. It reflects the long-term funds deployed in the business.
Gross Profit Margin
The Gross Profit Ratio is a profitability ratio that measures the percentage of gross profit to net sales. It indicates how efficiently a company produces and sells its goods.
Liquidity
Liquidity refers to a business's ability to convert assets into cash quickly to meet short-term obligations.
Profit Margin
The Profit Margin measures the percentage of net profit relative to net sales. It reflects a company's ability to generate profit after accounting for all expenses, including taxes and interest.
Profitability
A measure of how well a business turns revenue into profit.
Ratio Analysis
Ratio Analysis is a financial analysis tool that evaluates a company's financial performance using various ratios. It helps in assessing profitability, liquidity, efficiency, and solvency.
Return on Capital Employed
ROCE is a key profitability ratio that measures how efficiently a company generates profit from its capital employed.
$$\text{ROCE} = \frac{\text{Profit before interest and tax}}{\text{Capital employed}} \times 100$$
A higher ROCE indicates efficient use of capital in generating profits.