Return on Capital Employed

aka Capital Efficiency, Cash Turnover Ratio

Capital efficiency is the ratio of how much a company is spending on growing revenue and how much they’re getting in return. For example, if a company is earning one dollar for every dollar spent on growth, it has a 1:1 ratio of capital efficiency. You can also call it the return on capital employed, or ROCE [1] [2] [3] [4] [5] [6]


[2] Corporate Finance Institute. Retrieved May 21, 2021, from

[3] Chandler, G.N., and Hanks, S.H. 2002. Measuring the performance of emerging businesses: A validation study. Journal of Business Venturing.

[4] Murphy, G.B., Trailer, J.W., and Hill, R.C. 2003. Measuring performance in entrepreneurship research. Journal of Business Research.

[5] Sapienza, H.J., Smith, K.G., and Gannon, M.J. 2017. Using Subjective Evaluations of Organizational Performance in Small Business Research. American Journal of Small Business.

[6] Chandler, G.N., and Lyon, D.W. 2009. Involvement in Knowledge–Acquisition Activities by Venture Team Members and Venture Performance. Entrepreneurship Theory and Practice.

[7] Arthur Ventures . Retrieved May 21, 2021, from

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