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Usefulness of measure ROCE

This topic has 1 reply, 2 voices, and was last updated 3 years ago by John Moffat.

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September 10, 2021 at 5:51 pm #635363
HamzaYusuf
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What is the usefulness of the measure ROCE?
I have this question in my exam today but I was blank as to what to write… Please tell me what can we write about the usefulness of ROCE?
September 11, 2021 at 8:30 am #635491
John Moffat
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It is an accounts based measure, and although in theory NPV type measures are better, in practice shareholders look at the accounts and want the ROCE to increase (and, of course, the whole object is to keep shareholders ‘happy’).
I do explain this in my free lectures 🙂
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