Accounting Multiple Choice Question – 5 January 2018

Woodpecker Ltd provided a list of its assets and liabilities as at 31 December 2016 as follows.

• Long-Term Assets £300k
• Inventory £85k
• Accounts Receivables £40k
• Bank Account £10k
• Cash £5K
• Accounts Payable £65k
• Long-term Bank Loan £700k
• Reserves £125k
• Share Capital £100kRevenue £3,800k
• Cost-of-Sales £2,400k
• Net Profit Margin £300k
• Purchases £1,200k

What is Woodpecker’s ROCE percentage?

Select ONE answer:

1. 34.86
2. 36.84
3. 7.89
4. 58.33
5. 32.43

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 5 – Return on Capital Employed. Return on capital employed or ROCE is a profitability ratio that measures how efficiently a company can generate profits from its capital employed by comparing net operating profit to capital employed. £300k / (£700k + £125k + £100k) * 100 = 32.43%

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