... for measuring profitability. Higher ROCE means that management could utilize total assets efficiently to generate profit. ROCE of Tesco has been decreasing from 1999 to 2003 that is 16.57%, 16.17%, 16.06%, 15.48% and 13.85%. It means Tesco's performance may not be effective. Although PBIT has been increasing from 1999 to 2003 that is £ 932m, £ 1032m, £ 1179m, £1354m and £1541m, ROCE did not increase from 1999 to 2003. So the reason can be because of capital employed because capital employed has been increasing from 1999 to 2003, that is £ 5624m, £ 6382m, £ 7343m, £ 8747m and £ 11129m. But we will further discuss why ROCE decreased by analyzing net and gross profit margin and net asset turnover because it shape ROCE ( ROCE = Net Profit Margin * Asset Turnover ). Gross Profit Margin ( GPM ) It relates the gross profit for the period to the ...

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