return on capital employed
What return on capital employed means in Business A-Level, as defined for AQA.
Definitions of return on capital employed
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Reference: AQA
Operating profit divided by capital employed as a percentage, showing whether the plan beats what the existing assets already earn.
Operating profit divided by capital employed multiplied by 100, indicating the efficiency of past investments.
Operating profit divided by capital employed and multiplied by one hundred to give a percentage.
Topics that use return on capital employed
- Financial management (AQA A-Level)
- Problems with strategy and why strategies fail (AQA A-Level)
- Strategic decision making (A-level only) (AQA A-Level)
Related terms
- gearing
- Automation and the cost structure
- balanced scorecard
- budgets and trade offs
- competitive advantage
- Corporate social responsibility
- crowd funding
- environmental investment
Using return on capital employed in the exam
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