ROE vs ROCE
Compare return on equity and return on capital employed for Indian stock analysis.
ROE focuses on shareholder equity
ROE measures profit relative to shareholder equity. It can be useful, but leverage can make ROE look better than the underlying business quality.
ROCE looks at capital employed
ROCE considers debt and equity capital, making it useful for comparing capital-intensive businesses.
Use both with balance-sheet checks
Strong ROE and ROCE are more meaningful when debt, interest coverage, cash conversion, and reinvestment runway are also healthy.