Question 79 Chapter 4 of +2-B

Question 79 Chapter 4 of +2-B

Return On Investment (Or Return On Capital Employed)

79. (Return on Capital Employed) Net Profit after Interest but before Tax ₹ 1,40,000. Long Term Debts ₹ 4,00,000. Shareholders funds ₹ 2,40,000. Tax rate, 50%.
Calculate the return on capital employed.

The solution of Question 79 Chapter 4 of +2-B: – 

 

Return On Capital Employed Ratio=Net Profit before Interest and TaxX100
Capital Employed
 =   
 =₹ 2,00,000X100
 ₹ 6,40,000
 =31.25%  

 

Calculation of Net Profit before Interest and Tax

 =Net Profit + Interest on Debentures
 =₹ 1,40,000 + ₹ 4,00,000 x 15%
 =₹ 1,40,000 + ₹ 60,000
 =₹ 2,40,000
Calculation of Capital Employed=Shareholder’s Funds + Debentures/LT Debts
 =₹ 2,40,000 + ₹ 4,00,000
 =₹ 2,40,000

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 79 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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