Return on capital employed

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July 18, 2015 at 8:03 pm #261078
SOUD SAEED
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Hello Mr Moffat,

In inorder to calculate return on capital employed, earning before tax and interest has to be calculated first. Suppose in the income statement, there are 2 elements,

1) Finance cost- (interest on loans and other finance cost)
2) Finance income- (interest on deposits and related parties)

Should minus back the finance income from the earning before tax and interest?
July 19, 2015 at 8:47 am #261088
John Moffat
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You should use the operating income – so you would remove the finance income
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