• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

ROCE dropping affected how?

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › ROCE dropping affected how?

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by Ken Garrett.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 17, 2016 at 4:15 pm #349615
    weijiang
    Member
    • Topics: 5
    • Replies: 6
    • ☆

    In the Jun/2012 Q1 a) financial position analyse
    ROCE has dropped from 24.14% to 6.45% which is 17.69% in 4years. It was due to the increased long term bank loan, decreased revenue caused by the competition from oversea cheap products and increased labor cost worsened the PBIT.It should be a concern for the shareholders and company.

    My question is how shareholders and company is going to be affected ?
    It is a family business it is unlikely they may withdraw their investment since they are the only shareholders.Only affect I could come up with was the wealth of the shareholder may decrease.
    The affect to company it may have a significant impact on the ability to generate finance to support the day to day operation & future
    development.

    I am not sure what my answer were sufficient and relevant .

    November 17, 2016 at 7:13 pm #349667
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    Your points are fine. Family companies are usually more patient than listed companies when considering ROCE.

    It will affect wealth because interest hss to be paid out of poor profits before dividends. Raising more finance is also likely to be more difficult.

    November 18, 2016 at 1:57 am #349693
    weijiang
    Member
    • Topics: 5
    • Replies: 6
    • ☆

    Thank you for your explanation!
    I wonder how would u like to answer the significant of the ROCE in the real exam under the time pressure in order to score the marks, please.
    The official answer there were not any significant of the ROCE was mentioned.

    November 19, 2016 at 9:19 am #349958
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    I think I would simply mention that it was a disappointing trend and will make it difficult to raise finance in the future.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • julio99 on Impairments – Impairment (CGU) – ACCA Financial Reporting (FR)
  • effy.sithole@gmail.com on EPS – diluted EPS Example – ACCA Financial Reporting (FR)
  • Ken Garrett on The Finance Function in the Digital Age – CIMA E1
  • DeborahProspect on ACCA SBR Specimen Exam 2 Question 1
  • darshan.69 on Chapter 9 Pension Schemes TX-UK FA2023

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in