IN calculating the ROCE do we include the retained earnings also in the denominator,.,....?????? because the definition says share capital+reserves +long term debt. and normally reserves includes share premium account and the Revaluation reserve. So what about the retained earnings...?????????
Yeah we include retained earning also. Points to Remember: 1. Reserves = Retained Earnings + Other Reserves 2. Other Reserves = Share premium + Revaluation Reserve
retained Hi, yes retained earnings is one of the most important (and usually biggest) part of shareholders reserves. Must be added to bottom line in almost anything that needs "equity capital" on the bottom line. (eg gearing, ROCE, asset utilisation, ..)
shall we also deduct intangibles from the denominator from the share capital as done in previous ratios?
I'd tend to go 'end of the year'. Sometimes in the exam that's the only option, for example if the question gives a P&L for year X and the associated Statement of Financial Position as at end of year X!