Reports and returns

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I have a question on some hwk which i do not understand at all and i cannot find it in my notes! Im wondering if one of you guys could explain it me please? (Think it's in the ftc book which college never gave me)<BR><BR>If a return on capital measure included profit before tax and interest as the numerator, what would you expect to see as the denominator?<BR><BR>Thanks.

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Reports and returns

    ROCE = net profit before tax and interest/capital employed (total assets less liabilities/top part of your balance sheet
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Reports and returns

    so what is the denomiator then? (sorry still puzzled)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Reports and returns

    Hi Nik.<BR><BR>The denominator is simply the bottom half of the equation, in this case it is the capital employed.<BR><BR>Scott.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Reports and returns

    agree with scotty

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