ROCE
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]
[1] Retrieved May 21, 2021, from https://medium.com/signalfire-fund/top-5-metrics-vcs-look-at-for-series-a-b-c-c6a0171fd200
[2] Corporate Finance Institute. Retrieved May 21, 2021, from https://corporatefinanceinstitute.com/resources/knowledge/finance/cash-turnover-ratio-ctr/
[3] Chandler, G.N., and Hanks, S.H. 2002. Measuring the performance of emerging businesses: A validation study. Journal of Business Venturing. https://doi.org/10.1016/0883-9026(93)90021-v
[4] Murphy, G.B., Trailer, J.W., and Hill, R.C. 2003. Measuring performance in entrepreneurship research. Journal of Business Research. https://doi.org/10.1016/0148-2963(95)00159-x
[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. https://doi.org/10.1177/104225878801200304
[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. https://doi.org/10.1111/j.1540-6520.2009.00317.x
[7] Arthur Ventures . Retrieved May 21, 2021, from https://www.arthurventures.com/blog/why-capital-efficiency-matters