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Hi
I would like to ask two clarifications about ROCE and NET ASSET RATIO.
1) Am I correct if I say that “Capital employed” used in ROCE ratio is equal to Total asset (current asset + Non current asset)?
2) “Net Asset Turnover”is = total revenue/ Net asset (Total asset-current liabilities)
To make it shorter, my confusion is:
What should capital employed include?
What should Net asset include?Thanks
Gabbi
Capital employed is equity + non-current liabilities, which is the same as total assets minus current liabilities.
Net assets in asset turnover is total assets minus current liabilities
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