Calculate Return on Investment from the following information : Net Profit after Interest and Tax Rs 3 00 000 10% - Accountancy - Accounting Ratios

Question

Calculate Return on Investment from the following information : Net
Profit after Interest and Tax Rs 3 00 000 10% Débentures Rs
5 00 000 Tax Rate 40% Capital Employed Rs 40 00 000

Prakash · Accepted Answer

Net Profit Before Tax = 300000/60% = 500000
Add: Interest on debentures(500000?10/100) = 50000

Net Profit Before Interest and Tax = 550000

Return on Inv = Net Profit Before Int and Tax/ Cap Employed ?
100

= 550000/4000000 ? 100
= 13 75%

Calculate Return on Investment from the following information : Net Profit after Interest and Tax Rs.3 00 000 10% Débentures Rs.5 00 000 Tax Rate 40% Capital Employed Rs.40 00 000