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Lease adjusted ROCE for ASX stocks?

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darien44

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I've been reading a book by Phil Oakley, who talks about adjusting ROCE( Return On Capital Employed) for lease liabilities. The book is UK based and the author mentioned it would not be necessary after 2019( the book was published in 2016) due to new UK reporting conventions. I'm wondering if this is something that needs to be considered when working out a realistic ROCE for ASX stocks.
Thanks
 
darien44 said:
I've been reading a book by Phil Oakley, who talks about adjusting ROCE( Return On Capital Employed) for lease liabilities. The book is UK based and the author mentioned it would not be necessary after 2019( the book was published in 2016) due to new UK reporting conventions. I'm wondering if this is something that needs to be considered when working out a realistic ROCE for ASX stocks.
Thanks
Click to expand...

i haven't read that book , but the logic looks very much like something to assess your ( ASX-listed ) stocks ( and REITs ) with

now this might be a little complicated if you use leverage

i normally am very aware of the cash tipped into a stock ( which might be rescued later ) and the div./interest yield on said investment , because i am trying to build an income source ( as low-risk as sensible )

i am less focused on capital gains as they may ( or may not ) be crystallized in my lifetime and inflation will do some damage to those results

run the calculation on your existing holdings ( and potential buys ) and see if the metric is useful for you
 
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