What is the return on capital employed (ROCE)?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 3P
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The figures shown in the table below are an extract from the financial statements of Ridgeway (capital

employed is $1.5m).

$

Revenue 1,000,000

Cost of sales 400,000

Gross profit 600,000

Distribution expenses and administration cost 300,000

Profit before interest and tax 300,000

Finance cost 50,000

Profit before tax 250,000

Income tax expense 100,000

Profit after tax 150,000

What is the return on capital employed (ROCE)?

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