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

Illustration of extrinsic reward, Q. Illustration of extrinsic reward? ...

Q. Illustration of extrinsic reward? Monetary reward is an illustration of extrinsic reward and considered as the most important of all 'hygiene factors' according to Frederick

What are the characteristics of an effective control system, QUESTION S...

QUESTION Strategic decisions are the essence of strategic management. According to Pears & Robinson, typically, strategic issues have certain dimensions. Write short notes on e

Advantages of time study, 1. Output standards are easily convertible into...

1. Output standards are easily convertible into labor costs per unit of output. 2. Output standards facilities scheduling and controlling the flow of production thr

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

To adapt to or deal with the impact of change forces, QUESTION (a) Orga...

QUESTION (a) Organisations are systems that exist in the context of an external environment, an interdependent relationship, interact with it in order to survive and grow. Any

Styles of strategic management, Goold and Campbell identified three 'styles...

Goold and Campbell identified three 'styles of strategic management', looking at ways in which control can be divided between senior management and individual business units.

Strategy & principles-passing the test of moral scrutiny, Strategy & princi...

Strategy & principles:- Passing the Test of Moral scrutiny 1.   In choosing among strategic alternatives, companies' managers are well advice to embrace actions that are genui

Product and experience analysis, Product and experience analysis: The p...

Product and experience analysis: The product under research is Hotel Arpanaa, a holistic hotel located at Tiruvanamalai, India. It is a holitel that offers holistic experience

Explain operating profit margin - performance ratios, Q. Explain Operating ...

Q. Explain Operating profit margin - performance ratios? Operating profit mar =              (PBIT / Turnover) x 100% This is the ratio of operating profit to sales or turno

Strategic plan, do all organisations need strategic plan/ and what are the ...

do all organisations need strategic plan/ and what are the characteristics of good strategic plan

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