The summarised reformulated items (£) for BOLL Ltd in 2019 are given below: Net Operating Assets          17961                                     Operating Income                8654 Net Financial Assets            46200                                    Net Financial Income           2167 Common Share Equity      64161                                    Comprehensive Income    10821 (i) Calculate the Return on Common Equity (ROCE) using the first level decomposition approach, and discuss your result. (ii) In 2020, the company decided to distribute cash dividends of £40000 (such that its Net Financial Assets fell to £6200). Calculate ROCE for 2020 using the same approach, and discuss your new result.

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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The summarised reformulated items (£) for BOLL Ltd in 2019 are given below:
Net Operating Assets          17961                                     Operating Income                8654
Net Financial Assets            46200                                    Net Financial Income           2167
Common Share Equity      64161                                    Comprehensive Income    10821

(i) Calculate the Return on Common Equity (ROCE) using the first level decomposition approach, and discuss your result.
(ii) In 2020, the company decided to distribute cash dividends of £40000 (such that its Net Financial Assets fell to £6200). Calculate ROCE for 2020 using the same approach, and discuss your new result.

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