Illustrate about return on capital employed, Strategic Management

Assignment Help:

Q. illustrate about Return on capital employed?

Return on capital employed (ROCE) 

     =    (Profit before interest and tax (PBIT) / Capital employed) x 100%      

ROCE is also referred to as return on investment (ROI) and return on net assets (RONA).  ROCE measures profitability and shows how well the business is utilising its capital to generate profits.  Capital employed is debt and equity.  Equity means shareholders' funds (shareholders' funds) and debt means noncurrent liabilities.Capital employed can be found from the statement of financial position by taking the shareholders' funds (share capital and reserves) and long term debt.  A low ROCE is either caused by a low profit margin or high capital employed.  A high ROCE is either caused by high profit margin or low capital employed.  It is therefore important to look at the profitability, assets, liabilities and share capital when trying to give reasons for the change in ROCE.


Related Discussions:- Illustrate about return on capital employed

Explain about opportunity cost pricing, Q. Explain about Opportunity cost p...

Q. Explain about Opportunity cost pricing? Opportunity cost pricing is considered most mathematically correct way of viewing transfer pricing. Reason is that it looks at transf

Good y and good x, a) What can you say about GOOD Y and GOOD X (a good can ...

a) What can you say about GOOD Y and GOOD X (a good can be an item, a commodity, etc.).  Name a pair of good X and good y that can show this kind of relationship. b) Is the relati

Evaluating published research, Choose an academic article and produce an ac...

Choose an academic article and produce an academic review in which you analyse, criticise, and reflect on the paper, of no more than 1200 words. The summary should include some def

Managerial decision analysis, A transport company must collect and deliver ...

A transport company must collect and deliver loads from and to various locations along a straight road (call it the x -axis). The truck must start and end each day at the origin (t

Why are crafting & executing strategy important, Why are Crafting & Executi...

Why are Crafting & Executing Strategy Important? 1.   Crafting & executing strategy are the top managerial tasks for two very large motives:- (a). Here, compelling requirem

Create a pivot table, One rich seam of experimental data comes from meteoro...

One rich seam of experimental data comes from meteorological measurements.  Thousands of measurements are recorded each day by the Australian Bureau of Meteorology (BoM). This assi

In a cost/benefit analysis, Payback period = total cost of investment / est...

Payback period = total cost of investment / estimated annual revenue

Organisation strategic, According to strategic management, The company has ...

According to strategic management, The company has used location strategy to sustain its market share in the food and beverages industry. The company has selected high traffic area

Discuss the pillars of total productive maintenance, Question : (a) Wh...

Question : (a) When equipment or a part thereof suddenly stops working, the operating costs in that environment start increasing due to production losses, capacity losses and

Dynamic performance management process, Q. Dynamic performance management p...

Q. Dynamic performance management process? The beyond budgeting approach should lead to  A more dynamic performance management process that will enable organisations

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd