Question

Calculate ‘Return on Capital Employed’ from the following details :— Gross Profit

Rs.2,70,000; Administration Expenses Rs.60,000; Selling Expenses Rs.30,000; 12% Long-

Term Debts Rs.2,00,000; Tax Rate 40%; Non- Current Assets Rs.6,00,000; Current Assets

Rs.2,00,000; and Current Liabilities Rs.50,000.​

Answer 1

Answer:

ᴄᴜʀʀᴇɴᴛ ᴀꜱꜱᴇᴛꜱ = ᴛʀᴀᴅᴇ ʀᴇᴄᴇɪᴠᴀʙʟᴇꜱ + ᴩʀᴇ-ᴩᴀɪᴅ ᴇxᴩᴇɴꜱᴇꜱ + ᴄᴀꜱʜ ᴀɴᴅ ᴄᴀꜱʜ ᴇqᴜɪᴠᴀʟᴇɴᴛꜱ +

ᴍᴀʀᴋᴇᴛᴀʙʟᴇ ꜱᴇᴄᴜʀɪᴛɪᴇꜱ + ɪɴᴠᴇɴᴛᴏʀɪᴇꜱ

= ʀꜱ 1,80,000 + ʀꜱ 40,000 + ʀꜱ 50,000 + 50,000 + 80,000 = ʀꜱ 4,00,000

ᴄᴜʀʀᴇɴᴛ ʟɪᴀʙɪʟɪᴛɪᴇꜱ = ʙɪʟʟꜱ ᴩᴀyᴀʙʟᴇ + ꜱᴜɴᴅʀy ᴄʀᴇᴅɪᴛᴏʀꜱ + ᴇxᴩᴇɴꜱᴇꜱ ᴩᴀyᴀʙʟᴇ

= ʀꜱ 20,000 + ʀꜱ 1,00,000 + ʀꜱ 80,000 = ʀꜱ 2,00,000

ᴄᴜʀʀᴇɴᴛ ʀᴀᴛɪᴏ=ᴄᴜʀʀᴇɴᴛ ᴀꜱꜱᴇᴛꜱᴄᴜʀʀᴇɴᴛ ʟɪᴀʙɪʟɪᴛɪᴇꜱ=400000200000= 2 : 1