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WAEC Accounting 2013 Paper

Question : 12

Total: 48

\begin{array}{c|c} \text{Net profit} & 60,000 \\ \hline \text{Total assets} & 520,000 \\ \hline \text{Current liabilities} & 150,000 \\ \hline \text{Currents assets} & 280,000 \end{array}

The returns on capital employed is

Solution:

Concept:

Return on capital employed (ROCE) measures how efficiently a business earns profit from its total capital invested.

Explanation:

Capital employed means the total long-term funds used in the business.

It is calculated as total assets minus current liabilities.

Capital employed

= 520{,}000 - 150{,}000 = 370{,}000

ROCE is found by dividing net profit by capital employed and then multiplying by

100

ROCE

= \frac{60{,}000}{370{,}000} \times 100 = 16.2\%

Answer:

16.2\%

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