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Hi,
Currently studying ACCA F9.
In regards to ROCE on Capital Employed.
If for example the Return on Capital Employed equates to 14%, does this then mean that for every £1 that has been invested you are getting £1.14 in return?
Is this % the amount of profit from capital employed made annually or over the whole life of the project.
Thanks,
JimIt means that for every pound invested, then the profit each year from it will be 0.14 pounds.
It is the average profit per year over the life of the project.
Do watch my free lectures on this. The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
(and appreciate that the exam is always in $’s and not pounds 🙂 )
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