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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Net Profit after interest but before tax ₹1,40,000; 15% Long-term Debts ₹4,00,000; Shareholders’ Funds ₹2,40,000; Tax Rate 50%. Calculate Return on Capital Employed.
Interest = 15% of 4,00,000 = ₹60,000
Profit before Interest and Tax = Profit after Interest + Interest = 1,40,000 + 60,000 = ₹2,00,000
Capital Employed = Long-term Debts + Shareholders’ Funds = 4,00,000 + 2,40,000 = ₹6,40,000
Return on Capital Employed = Profit before Interest, Tax and Dividend ÷ Capital Employed × 100 = 2,00,000 ÷ 6,40,000 × 100 = 31.25%
(Note: Tax Rate is not required, since the required profit figure (before interest but before tax) already excludes tax.)
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.167 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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