Deferred Tax impact on ROCE

This topic has 1 reply, 2 voices, and was last updated 2 years ago by Stephen Widberg.

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July 31, 2023 at 9:07 am #689182
danwilkinson93
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Hi – it doesn’t affect profit before tax but how does it affect capital employed?
Thanks
July 31, 2023 at 6:09 pm #689199
Stephen Widberg
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Everyone calculates ROCE differently, but one view might be:

CE = interest bearing liabilities + equity

DT:

1. Would change equity – for example a DT expense of 10 will reduce RE and therefore equity.
2. No impact on interest bearing liabilities.

🙂
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