Return on Total Capital is = (net income+interest expense)/ avg total capital. Why do we need to add back interest expense?
It says total capital which includes debt too. As a result we need to add back the interest payments on the debt.
Return on Total Capital is = (net income+interest expense)/ avg total capital. Why do we need to add back interest expense?
It says total capital which includes debt too. As a result we need to add back the interest payments on the debt.