Which of the following statements is true?
A) The amount of profit a company makes is more important than return on capital employed (ROCE)
B) The amount of profit a company makes is less important than return on capital employed (ROCE)
C) The amount of profit a company makes is not related to return on capital employed (ROCE)
D) Shareholders are only concerned with the amount of profit a company makes

Question

Quizplus · Accepted Answer

Return on capital employed (ROCE) is a measure of how efficiently a company is using its capital to generate profits. This is a more important measure than simply looking at the amount of profit a company makes, as a company may have high profits but if it is using a lot of capital to generate those profits, it may not be a good investment for shareholders. Shareholders are interested in maximizing their return on investment, which is why ROCE is a key metric in evaluating a company's performance.

Which of the Following Statements Is True