What about total capital employed? This typically comprises two factors: net working capital and net fixed assets. In the net working capital number, we like to exclude excess cash (i.e., cash minus debt if cash happens to be much greater than debt) because extra cash is not an operating asset. Also, high-ROCE companies generate a lot of cash, and incorporating cash into the capital employed number will unnecessarily reduce ROCE. If you are uncomfortable with this, you can include a portion of cash in capital employed. For an acquisitive company, we also include the capital invested in
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