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F2: Advanced Financial Reporting
19.7 A
The redundancy costs have reduced during the current period. This would
improve operating profit margins and ROCE would improve.
Increases in borrowings (debt) and revaluation reserve (equity) would increase
capital employed. Assuming no change in operating profits, these events would
reduce the ROCE.
Return on capital employed uses profit before interest and tax. Finance costs
would not impact on the calculation of ROCE.
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