return on common equity
(ROCE)
Noun
The profitability ratio that reflects returns to the firm’s common shareholders and is calculated after deducting the returns paid to the creditors (interest) and the providers of senior equity capital (i.e., preferred shareholders): (Net Income − Preferred Dividends) ÷ Average Common Equity.
Synonym(s):
- ROCE ratio; return on common equity ratio; return-on-common equity ratio.