CIMA BA3 · Chapter 13 · Question 5 of 10
A company has profit before interest and tax of $46,800, equity of $210,000 and non-current liabilities (long-term loans) of $50,000. What is its return on capital employed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 18%
Explanation
Capital employed = equity + non-current liabilities = $210,000 + $50,000 = $260,000. ROCE = profit before interest and tax / capital employed = $46,800 / $260,000 x 100 = 18%.
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