Enter the EBIT and fixed capital into the ROEC calculator. The calculator will return the ROEC in percent.

## Return on Employed Capital Formula

The following formula is used to calculate the percent return on employed capital.

ROEC = EBIT / FC * 100

- Where ROEC is the return on employed capital (%)
- EBIT is the earnings before interest and tax
- FC is the fixed capital.

This formula can be substituted to include EBITDA instead of EBIT which is simply the earnings before interest and tax minus debts.

How to calculate return on employed capital

**Determine the EBIT**EBIT is short for earnings before tax and interest. This can show how much a company earns from investments.

**Find the fixed capital**Determine the fixed capital amount. This is how much money a specific company has invested.

**Calculate the ROEC**Enter the information from steps 1 and 2 into the calculator to evaluate the return on employed capital.

## FAQ

**What is return on employed capital?**

ROEC for short, is a measure or ratio of the investments of a company compared to it’s earnings.

**What does ROEC mean?**

ROEC can tell us how efficient one company is over another when it comes to returns on capital spent.

**How do companies improve ROEC?**

This is done mainly through the use of several management tools for reducing costs and increasing returns.

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