What is the significance of ROCE for my business, and how can I use it to make informed decisions?

ROCE is a critical metric for business, as it measures the efficiency and profitability of your capital utilisation. A higher ROCE indicates that your company is generating better returns on the capital invested in its operations, which is a positive sign for investors and potential lenders. By regularly calculating and monitoring your ROCE, you can assess your business’s financial performance over time and identify areas that need improvement. Moreover, ROCE can aid in making informed decisions about investment opportunities and capital allocation, helping you prioritise projects that offer higher returns and long-term profitability.