An increase in return on capital employed may be the result of
A) Higher net profit after tax and/or lower shareholders' funds
B) Higher net profit after tax and/or lower capital employed
C) Higher operating profit before interest and tax and/or lower shareholders' funds
D) Higher operating profit before interest and tax and/or lower capital employed

Question

Quizplus · Accepted Answer

Return on capital employed (ROCE) is calculated as operating profit before interest and tax divided by capital employed. Therefore, an increase in ROCE can result from either a higher operating profit or a lower capital employed.

An Increase in Return on Capital Employed May Be the Result