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In FR , told that ROCE=OPERATING MARGIN x ASSET TURN OVER.
But while studying for PM, told that ROCE = NET PROFIT MARGIN x ASSET TURNOVER.Please clarify , i PASSED FR.
Now i am preparing for PM , SBR-INTIn future, if you want me to answer you must ask in the Ask the Tutor Forum. This forum is for students to help each other.
Have you not watched my free lectures?
Because in the lectures I make it clear that as far as PM is concerned we regard the net profit as being the profit before interest and tax (which is the same as the operating profit), and I explain why.
(This obviously isn’t what we usually regard as being the net profit in financial accounts, but management accountants are not interested in financial accounts ‘rules’ – they are wanting to manage the business better 🙂 )
Do watch the lectures – they are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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