Accounting for IGCSE & O level - Advanced Principles (Section 3 - No. 45)
What does a decreasing ROCE suggest about a company?
The company is utilizing capital more efficiently.
The company is becoming less profitable in relation to its capital.
The company has a high level of revenue.
The company is increasing in value.
Explication
A decreasing ROCE indicates that the company is generating less profit for each dollar of capital employed.