Average operating profit ÷ average book value of assets, as a percentage.... more on: Accounting Rate of Return
A method of computing the profitability where the total cash inflow over the life of the project is reduced by expenses. This amount is divided by the estimated life of the project to arrive at an annual return. That's divided by the investment's cost. The result is an average rate of return. See Discounted Cash Flow.
The ratio of accounting profit to capital employed, also referred to as Return on Capital Employed (ROCE). The measure of capital employed can be either HCA or CCA.
the ratio of profit before interest and taxation to the percentage of capital employed at the end of a period. Variations include using profit after interest and taxation, equity capital employed, and average capital for the period.
A method for calculating the return on an investment in which the average annual cash flow from the investment is divided by the investment outlay.
In capital budgeting, it is the rate of return on an investment that is found by dividing the average annual income by the average cost.
An indicator of profitability that is measured by dividing the accounting net income by the amount invested. To Top