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ROCE Help please

jewels.pjewels.p Font Of All KnowledgeRegistered Posts: 1,774
When calculating ROCE does the NBV of Non-current assets get included in the Capital Employed figure or is it just Share Capital, Retained Earnings and Debentures? :confused1:

I HATE RATIOS!!!!!!

Comments

  • A-VicA-Vic Expertise Guaranteed Registered Posts: 6,970
  • jewels.pjewels.p Font Of All Knowledge Registered Posts: 1,774
    A-Vic wrote: »
    Me tooo here try this old thread

    " rel="nofollow">http://forums.aat.org.uk/showthread.php?t=25058&highlight=ROCE[/url

    Oh my God Vic this is a nightmare! Well at least I know you lot doin it last year were are as confused as I am now!:lol:
  • A-VicA-Vic Expertise Guaranteed Registered Posts: 6,970
  • jewels.pjewels.p Font Of All Knowledge Registered Posts: 1,774
    A-Vic wrote: »
    jewels.p wrote: »

    what you where still am lol and now gotta learn rona for MAC

    What the hell is Rona? That's the name of a Hairdressers in my Toon!:lol:

    Don't tell me there's more Ratios oh no why duznt this get any easier?
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    Return on Net Assets if I remember correct. Forgot the formula, but think it was operating profit/ net current assets or net assets or something alike!
  • DAVID LAWESDAVID LAWES Feels At Home Registered Posts: 29
    Roce
    jewels.p wrote: »
    When calculating ROCE does the NBV of Non-current assets get included in the Capital Employed figure or is it just Share Capital, Retained Earnings and Debentures? :confused1:

    I HATE RATIOS!!!!!!

    The Capital Employed figure (i.e. the one that goes on the bottom of the fraction) is:

    Total equity on balance sheet (i.e. share capital, share premium, retained earnings) + non-current liabilities.

    "Non-current liabilities" include : loans, preference shares and debentures.

    Hope this helps.
  • A-VicA-Vic Expertise Guaranteed Registered Posts: 6,970
    jewels.p wrote: »
    A-Vic wrote: »
    jewels.p wrote: »

    what you where still am lol and now gotta learn rona for MAC

    What the hell is Rona? That's the name of a Hairdressers in my Toon!:lol:

    Don't tell me there's more Ratios oh no why duznt this get any easier?

    Jewels dont worry about rona like sandy said thats mac not DFS
  • reddwarfreddwarf Experienced Mentor Registered Posts: 528
    this may be of use - it's a good site

    http://www.bized.co.uk/compfact/ratios/ror3.htm
  • jewels.pjewels.p Font Of All Knowledge Registered Posts: 1,774
    reddwarf wrote: »

    Cheers for that. Yeah looked at this site before. I also look at Accounting Coach.com it can sometimes help me too.......just not with Ratios I think noone can help there!:laugh:
  • SandyHoodSandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    I wonder if this might deserve a blog of its own.
    I think ROCE or RONA depends on a thorough understanding of the (Balance Sheet) or Statement of Financial Position, AND the (P and L) or Income Statement.

    If you understand these ~ and knowing the differences under international v UK standards is a tremendous start
    Then you can see lots of ways to get the figures to balance on the position statement, and as such many ways to get the figure that goes on the bottom of the equation.

    The income statement is less significant, return is the profit figure produced from operations and does not include any financing costs or taxation. But again, you could find it by working down the income statement taking off cost of sales, admin and distribution from the sales revenue or by working up from the profit available for distribution (ie the shareholders' earnings)

    It is my view that these two final accounts are what you need to thoroughly understand first. Once you do, then ROCE etc will follow and your understanding of what a company's ROCE means will follow from that.
    Sandy
    [email protected]
    www.sandyhood.com
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