**ROE (Return on Equity):**

- This is like looking at how well a business is using the money invested by its owners (shareholders).
- Formula: ROE = (Net Income / Shareholders’ Equity) * 100
- Example: If a company has a net income of ₹500,000 and shareholders’ equity of ₹2,000,000, then the ROE would be:

ROE = (₹500,000 / ₹2,000,000) * 100 = 25% - Interpretation: This means the company is generating a 25% return on the equity invested by shareholders.

**ROCE (Return on Capital Employed):**

- Think of this as checking how much money a business makes with all the funds it uses, including what it borrowed and what the owners invested.
- Formula: ROCE = (Operating Profit / Capital Employed) * 100
- Example: If a company’s operating profit is ₹800,000, and its capital employed (including equity and long-term debt) is ₹4,000,000, then the ROCE would be:

ROCE = (₹800,000 / ₹4,000,000) * 100 = 20% - Interpretation: A 20% ROCE indicates that the company is earning a 20% return on the total capital employed in its operations.

**Operating Profit** **Margin**

- Operating Profit Margin is like looking at how efficiently a company is making money from its core business activities.
- Formula: Operating Profit Margin = (Operating Profit / Total Revenue) * 100
- Example: If a company has an operating profit of ₹400,000 and total revenue of ₹1,000,000, then the operating profit margin would be:

Operating Profit Margin = (₹400,000 / ₹1,000,000) * 100 = 40% - Interpretation: A 40% operating profit margin means that for every ₹1 of revenue, the company retains ₹0.40 as profit after considering the expenses directly related to its main operations. It indicates how efficiently the company is managing its core business.

**Net Profit Margin:**

- This is like checking how much money a business keeps after paying all its bills, like rent, taxes, and ingredients.
- Formula: Net Profit Margin = (Net Profit / Total Revenue) * 100
- Example: If a company’s net profit is ₹200,000, and its total revenue is ₹1,500,000, then the net profit margin would be:

Net Profit Margin = (₹200,000 / ₹1,500,000) * 100 = 13.33% - Interpretation: This means the company retains 13.33% of its total revenue as profit after accounting for all expenses, including taxes.