Final answer:
Option B is the correct answer because ROCE does not measure the return on the equity in a company over a short period of time. The other options are true statements about different enterprise value metrics.
Step-by-step explanation:
Option B is the correct answer. The statement that ROCE is a profitability ratio that measures the return on the equity in a company in comparison to its financing over a short period of time is not true. ROCE stands for Return on Capital Employed, and it measures the profitability and efficiency of a company's capital investments over a longer period of time, typically over a year. It is calculated by dividing earnings before interest and taxes (EBIT) by the capital employed.On the other hand, option A is true. EV to revenue can be used to assess companies with negative cash flows or firms that are currently experiencing financial losses. It is an enterprise value metric that compares a company's enterprise value (EV) to its annual revenue. It helps to evaluate a company's valuation relative to its revenue.
Option C is also true. EBIT (earnings before interest and taxes) allows investors to assess the core operations of the business without worrying about the costs of the capital structure. It helps to understand the profitability of a company's operations before considering interest expenses and taxes.Option D is also true. EBITDAR is a metric that is used in businesses that have substantial rental and lease expenses. It stands for Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent. It helps to evaluate a company's operational profitability before considering the effect of interest, taxes, depreciation, and amortization.