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Hi sir, I went through some of the past exam papers and realise sometimes the examiner use operating profit or profit for the year to calculate ROCE.
My question is, when do I have to use the former and the latter (profit for the year)?
The examiner will most frequently give you a set of ratios already calculated from last year or a competitor …
In most situations the basis of the calculation of these comparable ratios will be given (or explained)
If there is no guidance given in the question, I suggest that you use PBIT as the numerator
OK?
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