Question

Calculate return on investment ?

Equity share capital = 4,00,000

Preference share Capital = 1,00,000

12% debentures = 2,00,000

current liabilities =50,000

Net profit before interest & tax = 1,00,000​

Answer 1

profit before interest and tax/

capital employed ×100

profit before interest and tax +

Debentures interest

100000+24000. = 124000

equity share + pre share

400000+100000

= 50000

124000÷500000=0.248×100 = 24.8