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What is the difference between ROE(Return on Equity) and
ROCE(Return on Capital Employed)?
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Answer / darshan
There is a correction to the above answer...Formula is
ROE= profit/equity
ROCE= profit/owners fund + borrowed fund
| Is This Answer Correct ? | 32 Yes | 11 No |
Return On Equity-ROE
The amount of net income returned as a percentage of
shareholders equity. Return on equity measures a
corporation's profitability by revealing how much profit a
company generates with the money shareholders haveinvested.
Return on Equity = Net Income/Shareholder's Equity
Net income is for the full fiscal year (before dividends
paid to common stock holders but after dividends to
preferred stock.) Shareholder's equity does not include
preferred shares.
Also known as "return on net worth" (RONW).
Return On Capital Employed-ROCE
A ratio that indicates the efficiency and profitability of a
company's capital investments.
ROCE=EBIT/Total Assets-Current Liabilities
| Is This Answer Correct ? | 17 Yes | 4 No |
Answer / vinaya
Return on equity (ROE) measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE shows how well a company uses investment funds to generate earnings growth. ROEs between 15% and 20% are considered desirable
ROE= Net income after tax/ shareholder equity
| Is This Answer Correct ? | 3 Yes | 1 No |
Answer / subhendu
ROE is the return that is calculated upon the profit gained
over the total shareholders equity in the market.
ROE= share capital/ profit earned by the firm.
ROC is also as same as ROE but with a little difference.
it is the return which we calculate upon the total capital
employed.
ROC = total debt+total equity/ PAT.
| Is This Answer Correct ? | 14 Yes | 41 No |
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