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Report composed of an interpretation of the ratios for Marks and Spencers and the House of Fraser
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| Submitted: Wed Aug 06 2003
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Findings This section of the report will be composed of an interpretation of the ratios for both companies. All ratios that form the ratio analysis will be explained, and any trends from within ratios will be highlighted. OVERALL PERFORMANCE Return on Capital Employed: Net profit before tax and interest x100 = % Capital employed The Return on Capital Employed ratio (R.O.C.E) is a hugely significant ratio, and a great deal can be taken from this ratio. The ratio relates to the profit earned in relation to the long-term capital invested in the business. The term 'capital employed' in this equation means the owners' capital plus any long term liabilities (for example long-term loans). This ratio shows the % return on capital invested in the company. A business will aim to have this ratio as high percentage as possible. If the percentage return on capital invested is less than that offered elsewhere, then it may...
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