What Is ROCE

Question 1

Three ways to imorove ROCE

Answer 1

• increase revenue with reducing costs
• pay back long term loans
• increase dividend payments

Question 2

Interpreting ROCE

Answer 2

• the higher the better = improving performance
• compared with interest rates = money would be better off in the bank / reinvested into company
• ideal = 15 - 20% depending on industry conditions