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GLOSSARIES
2. Financial glossary
> ROACE (Return on average capital employed)
Return on average capital employed (ROACE) is an internal and external indicator
used to measure profitability and assess the group’s performance. In the group’s
opinion, this performance indicator measures the long-term productivity of the
group’s capital.
ROACE is a performance measurement indicator of capital employed by the group,
as defined by management rather than by accounting standards. This should be
taken into account when using ROACE tomake comparisons with other companies.
The group defines ROACE as the return on average capital employed.
ROACE represents the after-tax operating profitability of capital employed by the
company for its operating requirements.
ROACE is equal to the ratio of net operating income to average capital employed.
Net operating income is equal to operating income less the corresponding pro forma
income tax derived by applying the nominal tax rate applicable to the operating
income of each subsidiary of the group.
Capital employed comprises the following:
p
net PP&E and intangible assets;
p
goodwill, other than goodwill related to equity associates;
p
prepayments and borrowings funding non-current assets;
p
inventories, trade receivables and other operating receivables;
p
less customer advances, trade payables and other operating liabilities;
p
less employee benefits and provisions for contingencies and losses, excluding
provisions for end-of-lifecycle operations and provisions for tax risk.
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2016 AREVA
REFERENCE DOCUMENT