Question: In ROCE disggregation, ROCE = RNOA + (LEV x Spread) where Spread = RNOA - NFR NFR = NFE/ Avg NOA NFE = Interest Expense

In ROCE disggregation, ROCE = RNOA + (LEV x Spread) where

Spread = RNOA - NFR

NFR = NFE/ Avg NOA

NFE = Interest Expense - Investment Return

Please explain what is NFR and NFE and how do they affect the spread. How does RNOA affect ROCE. Please give a detailed answer for a thumbs up.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

In ROCE disggregation, ROCE = RNOA + (LEV x Spread) where Spread = RNOA - NFR NFR = NFE/ Avg NOA NFE = Interest Expense - Investment Return Please explain what is NFR and NFE and how do they affect...

Q:

Question 3 (70 Marks) YTD Limited's and KKK Limited's financial information are presented for year 2020 (forecast), 2019, 2018 and 2017 as below. The reformulations of financial statements and...

Q:

FIN324 (AA) / Page 7 of 13 Question 3 (70 Marks) YTD Limited's and KKK Limited's financial information are presented for year 2020 (forecast), 2019, 2018 and 2017 as below. The reformulations of...

Q:

Use the information from the Income Statements and Balance Sheets to calculate the ratios in the image below for years provided (Numbers 1-6): Please provide examples of each equation used so that I...

Q:

Could someone help with Return on Invested Cap ratio's by showing me how to do 2021 and then I can complete the rest on my own? Please show where numbers are coming from and if possible show me how...

Q:

please kindly answer only B & C Question One: ROCE decomposition using reformulated financial statements Leonie, Inc. had the following summary financial data for the current year and the next year:...

Q:

Australian listed company Nick Scali Limited (ASX ticker: NCK). Balance Sheet 30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20 2017A 2018A 2019A 2020A $000 $000 $000 $000 Current Assets Cash and cash...

Q:

Question One: ROCE decomposition using reformulated financial statements Leonie, Inc. had the following summary financial data for the current year and the next year: Reformulated Balance Sheet...

Q:

I have attached the answer and guidelines to question 4. Could you explain qn 4 (e)? Thanks! Question 4 In 2018, the following information is available for Aere Perennius GmbH. Income statement for...

Q:

I need help with Qn4 (d) & (e). Would really help if you can explain and answer according to the examiner's commentaries & guidelines. Thank you! Question 4 In 2018, the following information is...

Q:

The International Gold Standard: Consider two countries, the U.S. (domestic) and U.K. (foreign), under the international gold standard. The central bank in each country offers a fixed currency price...

Q:

DGoPro went public on June 26, 2014, How do your DCF and relative valuations compare to the company's IPO price? How do they compare to its first trading day opening and closing prices? If your...

Q:

If investors are uncertain about their investment horizon, Question 4 options: the underlying assumptions of the CAPM are not called into question. the CAPM is no longer valid. the conclusions of the...

Q:

3. Gains from trade Consider two neighboring island countries called Felicidad and Bellissima. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a...

Q:

5. Stagflation lower output and higher prices is caused by a. an expansion in aggregate demand. b. a contraction in aggregate demand. c. a favorable shock to aggregate supply. d. an adverse shock...

Q:

4. An expansion in aggregate demand increases in the short run. In the long run, however, it increases only the . a. real GDP, price level b. real GDP, velocity of money c. the unemployment rate,...

Q:

2. Which of the following changes would contribute to a decline in the index of leading indicators, suggesting that a recession is more likely? a. a rise in stock prices b. a rise in building permits...