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Hello Sir,
Could you please explain sir, how do we calculate Return on capital Employed ( RoCe ) and interest cover ratio when doing financial analysis in many scenarios. For interest cover ration, interest is not mentioned in many questions.
Thanks
ROCE = Profit before tax and interest/CE
CE = Share capital + reserves + long term loans
If interest isn’t given in a question you can’t calculate interest cover.
Thank you very much..
Is retained earnings same as reserves and long term borrowings as long term loansHowever there are certain questions where Interest is not mentioned but yet interest cover ratio has been calculated.
for example in June 2012 question Hammond Shoes
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