Reference Entry

accounting rate of return

Jonathan Law

in A Dictionary of Finance and Banking

Sixth edition

Published in print March 2018 | ISBN: 9780198789741
Published online March 2018 | e-ISBN: 9780191831430
accounting rate of return

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An accounting ratio that expresses the profit of an organization before interest and taxation, usually for a year, as a percentage of the capital employed at the end of the period. Variants of the measure include using profit after interest and taxation, equity capital employed, and the average of opening and closing capital employed for the period. A variation of this measure can be used to forecast return on an investment project although ...

Reference Entry.  93 words. 

Subjects: Banking ; Social Sciences ; Economics

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