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ROCE stands for Return on Capital Employed.

This financial ratio analyzes a company’s ability to generate income based on the capital it has employed. In personal finance, it is the return on an asset in which you have invested based on the capital you have invested out of your own pocket.

For example, when buying a home as an investment with a mortgage and renting it out, you would use only the money you actually paid out and not the full price of the home.