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    • Profile photo of John Moffat says

      For ROCE, I am not sure why you are asking this question – they are part of the long term capital.

      For other purposes, irredeemable preference share should be treated as equity whereas redeemable preference share should be treated as debt.
      (Although obviously this is irrelevant for the purposed of ROCE, since they are both long term capital.)

      • avatar says

        Thank you very much John. That’s quite informative. I had several schools of thought before now, that’s why I ask. Many thanks for this clarification.

  1. avatar says

    Dear Sir,

    Can we use total assets in the denominator of the asset turnover ratio instead of total long term capital. However, in the example, I don’t find exact equivalent of long term capital of $2690 in the asset side of the balance sheet ?

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