In order to calculate the ROCE
, two actions were required:
Where PAT/net sales stand for ratio of profit margin (PAT) on net sales for firm i in year y, PAT/TA stands for ratio of profit (PAT) on total assets for firm i in year y, ROCE
stands for ratio of profits on capital employed for firm i in year y, Ln NS stands for Naural Logarithm of Net sales for firm i in year y, Ln TA stands for Naural Logarithm of Total Assets for firm i in year y, a stands for (Intercept) constant term, [beta]s stand for regression Coefficients (Slope) and [epsilon] stand for error (Residual) term.
of the 2006 acquisitions meet our ROCE
targets although several are currently
As a result, Canadian companies focused on increasing operating efficiencies during the reporting period, reflected in the average increase in ROCE
Each strategy also must contain financial information, including both historical sales growth and ROCE
, and at least a five-year forecast of sales and ROCE
As widely accepted as NPV and ROCE
models are in evaluating potential investments, these are only arithmetic in relation to the true nature of investment opportunities.
However, based on Adjusted R2, which is highlighting that the various independent variables are justifying their impact on ROCE
and the value of Durbin-Watson, which is suggesting about the problem of auto-correlation, model 7 is the most preferred model.
Our performance improved clearly in 2005," said Jukka Moisio, president and CEO, "although it still remained below our long-term target level for ROCE
The IBM on demand business model for the forest, paper and packaging industry outlines a path of actions that can give the companies a significant boost to the ROCE
Many small societies achieved a negative return on capital over the last three years and the Co-operative Commission has recommended a minimum target of 10% for ROCE
for every society, he said.
target has been revised from 13% to 15% for Tissue and, for Forest Products, from 11% to being in the top quartile of the sector.
is defined as net income plus after-tax interest expense, divided by average capital employed.