Return on net assets

Esme
Esme Experienced MentorRegistered Posts: 711
I'm attempting June 09's exam and am stuck on 2.1avii.

Is return on net assets the same as ROCE?

If it is then how do I calculate operating profit? If it's not.. how do I calculate it?

Thanks in advance x

Comments

  • lorrydee
    lorrydee New Member Registered Posts: 10
    Hi

    Yes they are one and the same....

    To work out your Operating Profit......

    SALES less COST OF SALES = GROSS PROFIT

    GROSS PROFIT less Marketing/Distribution/Admin costs = OPERATING PROFIT or PROFIT BEFORE TAX

    Hope this helps?
  • Esme
    Esme Experienced Mentor Registered Posts: 711
    Brilliant.. thanks!
  • SandyHood
    SandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    Net assets is a clear definition but watch out, Capital Employed is not always the same.
    Where there are long term liabilities they make the difference.
    PEV will examine RONA, and so will MAC (they will not test ROCE)

    Net current assets + fixed assets = Capital Employed

    Net current assets + fixed assets - long term liabilities = Net Assets
    Sandy
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    www.sandyhood.com
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