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

Diversification, refer to case scenario,is ICP''s focuse low-cost/price str...

refer to case scenario,is ICP''s focuse low-cost/price strategy opproprate for its industy?why?

Analyze and diagnose a current and significant organization, Option A. ...

Option A. Identify, analyze, and diagnose a current and significant organization problem or objective that directly involves any one or more of the following organizational be

Stock control and depreciation, Write policy guidelines for Heads of Depart...

Write policy guidelines for Heads of Departments on: Cash Flow and Capital Investment Stock Control and Depreciation.

Explain about value based management, Q. Explain about Value based manageme...

Q. Explain about Value based management? Value based management (VBM) is an approach which focuses on strategies and actions to create more value for shareholders.  Value being

Factors about transfer pricing, Q. Factors about transfer pricing? ...

Q. Factors about transfer pricing? Does the supplier have a solid track record for delivery e.g. references from other satisfied customers in terms of the quality of servic

Illustrate about value for money framework, Q. Illustrate about Value for m...

Q. Illustrate about Value for money framework? The value for money (VFM) framework (the 3Es)  Economy (Cheap) e.g. is the organisation procuring resources at the lowe

Knowledge management techniques, Bert's Bonsai sells Bonsai plants, tools a...

Bert's Bonsai sells Bonsai plants, tools and materials to cultivate them, and literature in book and magazine form. An early adopter of electronic records, they are still happily u

Show the activity based budgeting, Q. Show the Activity based budgeting? ...

Q. Show the Activity based budgeting? Activity based budgeting (ABB) uses cost  'drivers'  for  different  support  resources consumed e.g. machining, quality control or admini

What is strategy?, What Is Strategy? 1. A company's strategy is manage...

What Is Strategy? 1. A company's strategy is management's game plan for how to grow up the business, how to attract & please customers, how to compete effectively, how to cond

Investigate the reasons for the failure of strategies, Question: John T...

Question: John Taylor is the Strategic Policy Director of ACCESS International, a large marketing company specialising in buying a variety of manufactured products from the USA

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