- This topic has 1 reply, 2 voices, and was last updated 3 years ago by
.
-
Posts
-
Can you please explain WHY when we calculate ROCE in some examples we subtract Depreciation from the total profits and sometimes we don’t at all!!
The example 8 in Open tuition notes doesn’t even mention depriciation and we still subtracted it, please let me know 🙁ROCE is an accounting measure and uses the accounting profits which are always after subtracting deprecation.
If you are given the cash flows (as in example 8) then these are obviously before charging depreciation, and therefore we need to subtract the depreciation in order to arrive at the profit.
I do hope that you are not using the notes without watching the lectures, where I do explain this. That would be pointless because the notes are not a Study Text and it is in the lectures that I work through the examples and explain and expand on the notes. If you are not watching the free lectures for any reason then it is vital that you buy a Study Text and study from there.
- You must be logged in to reply to this topic.