Hey guys,

So I’ve been sleeping over one small dilemma i.e. why do we take pre-tax earnings in ROCE and why not pre-tax earnings in ROIC. now I’ve come across people saying that its to prevent differences arising out of tax expenses among companies making comparability logical. well if that’s the case, why not do the same for ROIC ?

That’s pretty existential stuff you’re asking. It boils down to, it’s just how those measures are traditionally defined (and specially in the curriculum). One is a pre-tax measure, the other is after-tax. In your investment analysis you’re of course free to calculate whatever measure you require, so no one’s stopping you from calculating both as after-tax for your purposes.