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capitaux employés

English translation: return on investment

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11:51 Jul 16, 2002
French to English translations [PRO]
Bus/Financial
French term or phrase: capitaux employés
The complete expression is "taux de rendement de rémunération des capitaux employés". Is this "return on investment"?
Mary Lalevee
United Kingdom
Local time: 13:05
English translation:return on investment
Explanation:
Mary,
I have never heard the expression

"taux de rendement DE REMUNERATION etc

only: taux de rendement or
taux de remuneration..

could you please check?
taux de remuneration de capital employee for me is plain RETURN ON INVESTMENT, AKA, ROI
Selected response from:

Jane Lamb-Ruiz
Grading comment
Thanks.
Mary
4 KudoZ points were awarded for this answer

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Summary of answers provided
5return on investmentJane Lamb-Ruiz
5capital employed
Eva Blanar
4 +1return on capital employedPaula Price
5Return on Equity / ROEJH Trads
4Yes! Or just plain "yield"
Arthur Borges
5 -1applied capitals
Clauwolf


Discussion entries: 1





  

Answers


34 mins   confidence: Answerer confidence 5/5 peer agreement (net): -1
applied capitals


Explanation:
:)

Clauwolf
Local time: 09:05
Native speaker of: Native in PortuguesePortuguese
PRO pts in pair: 75

Peer comments on this answer (and responses from the answerer)
disagree  Helen D. Elliot: My finger slipped below. This is not employed capital or ROCE (return on employed capital) How do you account for the "**de rémunération**?
1 hr
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38 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5
Yes! Or just plain "yield"


Explanation:
There's no point translating "taux" in most cases.

Arthur Borges
China
Local time: 20:05
PRO pts in pair: 404
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45 mins   confidence: Answerer confidence 5/5
Return on Equity / ROE


Explanation:
HTH

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Note added at 2002-07-16 12:44:58 (GMT)
--------------------------------------------------

Si dans votre contexte les capitaux employés incluent également de la dette, alors la traduction correcte est Return on Capital / ROC. La référence suivante explique la différence:


Subject: Analysis - Return on Equity versus Return on Capital

Last-Revised: 7 June 1999
Contributed-By: John Price (johnp at sherlockinvesting.com)

This article analyzes the question of whether return on equity (ROI) or return on capital (ROC) is the better guide to performance of an investment.

We\'ll start with an example. Two brothers, Abe and Zac, both inherited $10,000 and each decided to start a photocopy business. After one year, Apple, the company started by Abe, had an after-tax profit of $4,000. The profit from Zebra, Zac\'s company, was only $3,000. Who was the better manager? I.e., who provided a better return? For simplicity, suppose that at the end of the year, the equity in the companies had not changed. This means that the return on equity for Apple was 40% while for Zebra it was 30%. Clearly Abe did better? Or did he?

There is a little more to the story. When they started their companies, Abe took out a long-term loan of $10,000 and Zac took out a similar loan for $2,000. Since capital is defined as equity plus long-term debt, the capital for the two companies is calculated as $20,000 and $12,000. Calculating the return on capital for Apple and Zebra gives 20% (= 4,000 / 20,000) for the first company and 25% (= 3,000 / 12,000) for the second company.

So for this measure of management, Zac did better than Abe. Who would you invest with?

Perhaps neither. But suppose that the same benefactor who left money to Abe and Zac, also left you $100 with the stipulation that you had to invest in the company belonging to one or other of the brothers. Who would it be?

Most analysts, once they have finished talking about earnings per share, move to return on equity. For public companies, it is usually stated along the lines that equity is what is left on the balance sheet after all the liabilities have been taken care of. As a shareholder, equity represents your money and so it makes good sense to know how well management is doing with it. To know this, the argument goes, look at return on equity.

Let\'s have a look at your $100. If you loan it to Abe, then his capital is now $20,100. He now has $20,100 to use for his business. Assuming that he can continue to get the same return, he will make 20% on your $100. On the other hand, if you loan it to Zac, he will make 25% on your money. From this perspective, Zac is the better manager since he can generate 25% on each extra dollar whereas Abe can only generate 20%.

The bottom line is that both ratios are important and tell you slightly different things. One way to think about them is that return on equity indicates how well a company is doing with the money it has now, whereas return on capital indicates how well it will do with further capital.

But, just as you had to choose between investing with Abe or Zac, if I had to choose between knowing return on equity or return on capital, I would choose the latter. As I said, it gives you a better idea of what a company can achieve with its profits and how fast its earnings are likely to grow. Of course, if long-term debt is small, then there is little difference between the two ratios.

Warren Buffett (the famous investor) is well known for achieving an average annual return of almost 30 percent over the past 45 years. Books and articles about him all say that he places great reliance on return on equity. In fact, I have never seen anyone even mention that he uses return on capital. Nevertheless, a scrutiny of a book The Essays of Warren Buffett and Buffett\'s Letters to Shareholders in the annual reports of his company, Berkshire Hathaway, convinces me that he relies primarily on return on capital. For example, in one annual report he wrote,\"To evaluate [economic performance], we must know how much total capital—debt and equity—was needed to produce these earnings.\" When he mentions return on equity, generally it is with the proviso that debt is minimal.

If your data source does not give you return on capital for a company, then it is easy enough to calculate it from return on equity. The two basic ways that long-term debt is expressed are as long-term debt to equity DTE and as long-term debt to capital DTC. (DTC is also referred to as the capitalization ratio.) In the first case, return on capital ROC is calculated from return on equity ROE by

ROC = ROE / (1 + DTE),

and in the second case by:

ROC = ROE * (1 - DTC)

For example, in the case of Abe, we saw DTE = 10,000 / 10,000 = 1 and ROE = 40% so that, according to the first formula, ROC = 40% / ( 1 + 1) = 20%. Similarly, DTC = 10,000 / 20,000 = 0.5 so that by the second formula, ROC = 40% (1 – 0.5) = 20%. You might like to check your understanding of this by repeating the calculations with the results for Zac\'s company.

If you compare return on equity against return on capital for a company like General Motors with that of a company like Gillette, you\'ll see one of the reasons why Buffett includes the latter company in his portfolio and not the former.



--------------------------------------------------
Note added at 2002-07-16 12:50:45 (GMT)
--------------------------------------------------

return on investment ne convient pas ici, ce terme s\'utilise pour analyser la rentabilité d\'un investissement particulier, comme par exemple l\'aquisition d\'une machine, et non de l\'ensemble du capital investi

j\'espère que ceci vous sera utile


    nat F,exp bus/fin.
JH Trads
United States
Local time: 07:05
Native speaker of: Native in SpanishSpanish, Native in FrenchFrench
PRO pts in pair: 665
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49 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +1
return on capital employed


Explanation:
RCU (return on capital employed)

Taux de rendement des capitaux employés : EBIT/ Capitaux employés (Immobilisations nettes + BFR)


Paula Price
Local time: 13:05
Native speaker of: Native in EnglishEnglish
PRO pts in pair: 68

Peer comments on this answer (and responses from the answerer)
agree  Piotr Kurek
8 mins

disagree  Helen D. Elliot: this is not RO
1 hr

agree  Yakov Tomara
2 hrs
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3 hrs   confidence: Answerer confidence 5/5
return on investment


Explanation:
Mary,
I have never heard the expression

"taux de rendement DE REMUNERATION etc

only: taux de rendement or
taux de remuneration..

could you please check?
taux de remuneration de capital employee for me is plain RETURN ON INVESTMENT, AKA, ROI

Jane Lamb-Ruiz
Native speaker of: Native in EnglishEnglish, Native in PortuguesePortuguese
PRO pts in pair: 8576
Grading comment
Thanks.
Mary
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4 hrs   confidence: Answerer confidence 5/5
capital employed


Explanation:
This is ROCE Return on Capital Employed and may mean three different things:
(the rate of return on)
- gross assets,
- shareholders' equity and
- long-term capital employed.

(The long-term capital is the shareholders' fund + the long-term loans of the company.)

This is always to be specified for clarity, but it is often omitted in company papers and, in this case, we ought to assume that this is the return on equity + long-term debt.

Yes, basically, this is return on investments, but a specific kind of it, because it refers to monies invested into equities.

Eva Blanar
Hungary
Local time: 14:05
Native speaker of: Hungarian
PRO pts in pair: 109
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