1) Formula for ROCE which is PBIT/CE. Here, CE= Equity + debt.
In debt we consider only long term loans or do we also consider preference share capital?
2) One of the formula for Dividend payout ratio which is Total dividend paid divided by PAT. Here from PAT will we deduct Preference dividend or not?
Ask the Tutor ACCA FM
Formula
7y ago#11 Preference shares are part of total capital employed
2 It is dividend to ordinary shareholder divided by earnings available to ordinary shareholders
1) And so preference share capital is considered as debt here instead of equity, correct?
2)Sir is Retained earnings = PAT - Preference dividend - Ordinary dividend?
7y ago#31 Redeemable shares are considered as debt, irredeemable shares are considered as equity. In either case they are part of the total long-term capital.
2. Yes (although that is not relevant to what you asked in your original question).
Sign in to reply to this topic.