The correct answer is D. Net capital employed.
Net capital employed is the total amount of money that a company has invested in its assets, including both fixed and current assets. It is a measure of a company’s financial resources and its ability to generate profits.
The rate of return on net capital employed (ROCE) is a profitability ratio that measures how efficiently a company uses its capital to generate profits. It is calculated by dividing a company’s net income by its net capital employed.
A high ROCE indicates that a company is using its capital very efficiently to generate profits. A low ROCE indicates that a company is not using its capital very efficiently to generate profits.
The other options are not as good measures of operating performance because they do not take into account the amount of capital that a company has invested in its assets.
A. Total assets is the total value of all of a company’s assets, including both fixed and current assets. It is a measure of a company’s size, but it does not take into account how efficiently a company is using its assets.
B. Fixed assets are assets that a company owns and uses for a long period of time, such as land, buildings, and equipment. They are a measure of a company’s investment in its long-term growth, but they do not take into account how efficiently a company is using its fixed assets.
C. Shareholder’s equity is the amount of money that shareholders have invested in a company. It is a measure of a company’s financial resources, but it does not take into account how efficiently a company is using its resources.