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King metric for stock market returns- ROCE or ROE?

Akhil discusses the debate between Return on Equity (ROE) and Return on Capital Employed (ROCE) as key metrics for evaluating stock market returns. ROE measures net income against shareholders' equity, while ROCE assesses EBIT over total capital employed. Both metrics evaluate capital efficiency but from different perspectives. ROCE reflects operational efficiency unaffected by capital structure, whereas ROE focuses on shareholder returns, making it the preferred metric for investors seeking higher returns. Notably, only 24% of stocks on the NSE have an ROE exceeding their ROCE, indicating a concerning trend in corporate financial health and the need for improved access to innovative debt capital. The author emphasizes the importance of enhancing debt availability for corporate growth and efficient capital utilization.