Please solve this question step by step with calculation
Dear Student,
Answer (i)
Return on Capital Employed = Net Profit before Interest,Tax and Dividend /CapitalEmployed × 100
Capital Employed = Fixed Assets+ Current Assets – Current Liabilities
= 10,00,000 + 3,60,000– 1,60,000
= 12,00,000
Return on Capital Employed =
2,80,000/ 12,00,000 × 100= 23.33%
Answer (ii)
Shareholder’s Fund = Share Capital + Reserve and Surplus
= 8,00,000 + 2,00,000
= 10,00,000
Profit after Tax = 2,80,000 - 50% = 1,40,000
Return on Shareholders’ Fund = Profit after Tax / Shareholders' Funds × 100
= 1,40,000 / 10,00,000 x 100
= 14%
(Note :- It is assumed that interest & divident is declared and not yet paid.)
Regards
Answer (i)
Return on Capital Employed = Net Profit before Interest,Tax and Dividend /CapitalEmployed × 100
Capital Employed = Fixed Assets+ Current Assets – Current Liabilities
= 10,00,000 + 3,60,000– 1,60,000
= 12,00,000
Return on Capital Employed =
2,80,000/ 12,00,000 × 100= 23.33%
Answer (ii)
Shareholder’s Fund = Share Capital + Reserve and Surplus
= 8,00,000 + 2,00,000
= 10,00,000
Profit after Tax = 2,80,000 - 50% = 1,40,000
Return on Shareholders’ Fund = Profit after Tax / Shareholders' Funds × 100
= 1,40,000 / 10,00,000 x 100
= 14%
(Note :- It is assumed that interest & divident is declared and not yet paid.)
Regards