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Sir if ROCE of company of 15% is lower than sector average of 20%. and here we have to calculate in terms of % the underperformance then would we do as follow
20-15= 5/20 x 100 = 25%
Similarly, if ROCE of company of 25% is higher than sector average of 20%. and here we have to calculate in terms of % the overperformance then would we do as follow
25-20 = 5/20 x 100 = 25%
Hi,
I’m not too sure why you’re doing what you’re trying to do. I don’t recall being asked to do this in any previous FR exams.
Thanks
In dec 12 , there was a question “Quartile”, its ROCE was 12.1%, and the sector’s ROCE was 16%, so while writing the commentary examiner has mentioned that Measured as a percentage, this underperformance is 28% ((16·8– 12·1)/16·8).
So suppose the commpany’s ROCE was 15% and the sector’s ROCE was 10%, so while writing the commentary we will write the overperformance is __.
So here we will calculate this as ((10– 15)/10) = 33.33%. Is this calculation correct or wrong?
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