ROCE based upon closing capital employed

Hi John

I hope you are well.

May I ask your input on one short point?

In my BPP revision kit there is a question about calculating the ROCE based upon “closing capital employed”. This is: total assets (or total equities) – payables due within one year.

The same “closing capital employed” is use to workout asset turnover (however the question does not explicitly state to use it, though the answers do).

Could you help me understand the rationale of this? The ‘payable due within one year’ are due so at the year end (presumably) so do not effect the year in question (being used to calculate the ROCE). Why is this subtracted and titled ‘closing capital employed’?