ROCE Lower than Borrowing Rate

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ROCE Lower than Borrowing Rate
Can anyone please break down for me how shareholders earnings will be reduced if ROCE is lower than the borrowing rate?

Why ROCE Should not Be Lower Than Borrowing Rate?
Subhaschandra Shenoy, Member
As you know ROCE = Operating Profit (EBIT) / Equity Shareholders Fund.
As the EBIT reduces, the % of ROCE will be reduced. Hence the minim...Sign up

muton, Accountant, Cameroon, Member
The explanation as to the inverse proportional relationship of ROCE and borrowing rate is not clear....Sign up


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