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lgarside
lgarside Registered Posts: 122 Dedicated contributor 🦉
in General discussion
How did everyone calculate the return on equity? Did you take the profit before Int and tax or use the post tax fig? Also did you use net assets or net assets plus long term loans? I kept getting confussed between return on equity and return on capital employed!!!!!

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  • Scandal
    Scandal Registered Posts: 2 New contributor 🐸
    Yes that is the one that i messed up on!
    you are to take profit after tax and divide by equity (ie, net assets) - i divided by TA-CL for some unknown reason! i also gave the wrong definition of this ratio. i think that was the only thing i did wrong though!
  • immense
    immense Registered Posts: 97 Regular contributor ⭐
    I hate to say this - but according to BPP's passcards - return on equity is different to ROCE!! It is profit after tax divded by shareholders funds (share capital and reserves!). I have soo got this wrong as i did ROCE!! I swear we weren't taught this either!! Let's hope the examiner meant ROCE!
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
    Sure they'll give you partial credits for this?

    I was confused by the Kaplan book, in there it states return on owners equity as profit before tax over equity.

    Whats the difference ebtween that ration and return on equity?!

    :confused1:

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