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WAEC Financial Accounting 2013 Question 12

Question 12

Interpretation of Accounts

Use the following information to answer questions 10 to 12.
Net profit: ₦60,000
Total assets: ₦520,000
Current liabilities: ₦150,000
Current assets: ₦280,000
The returns on capital employed is

  1. A.17.2%.
  2. B.16.2%.
  3. C.15.2%.
  4. D.11.2%.
Show the answer and explanation

Answer: B (16.2%.)

Explanation

ROCE = net profit ÷ capital employed × 100 = 60,000 ÷ 370,000 × 100 = 16.2%.