Page 288 - FR Integrated Workbook 2018-19

Chapter 21

1.7 Return on capital employed (ROCE): calculation
Profit from operations
Capital employed × 100%

1.8 Return on capital employed: reasons for movement

 efficiency: movement in asset turnover

 profitability: movement in operating profit margin

 combination of both

1.9 Profitability ratio relationship

Operating profit margin × Asset turnover = ROCE

Profitability × Efficiency = Return

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