Ratios

revision Flash Cards for ROCE, Acid Test, Working Capital, Profit Margin

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  • Created by: dansydes
  • Created on: 13-12-11 16:08

ROCE

Stands for Return on Capital Employed

(100 x Net Profit) / Capital

Net profit = $5,000

Capital = $100,000

ROCE = (100 x 5,000) / 100,000

= 5 = 5%

ROCE is very useful for comparing businesses about how much return they are getting form their initial investment

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