Formula

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January 6, 2019 at 6:59 pm #500210
maxpopper
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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?
January 7, 2019 at 8:25 am #500246
John Moffat
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1 Preference shares are part of total capital employed

2 It is dividend to ordinary shareholder divided by earnings available to ordinary shareholders
January 7, 2019 at 1:12 pm #500274
maxpopper
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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?
January 7, 2019 at 2:18 pm #500281
John Moffat
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1 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).
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