Accounting Multiple Choice Question – 7 February 2018

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Wood Pigeon Ltd has provided a list of its assets and liabilities as at 31 December 2017 as follows:

  • Long-Term Assets £400k
  • Inventory £185k
  • Accounts Receivables £140k
  • Bank Account £110k
  • Cash £50K
  • Accounts Payable £165k
  • Long-term Bank Loan £800k
  • Reserves £250k
  • Share Capital £200k
  • Revenue £4,800k
  • Cost-of-Sales £3,400k
  • Net Profit Margin £600k
  • Purchases £1,800k

What is Wood Pigeon’s ROCE percentage?

Select ONE answer:

  1. 16.67
  2. 29.17
  3. 48.00
  4. 41.18
  5. 12.50

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 3 – 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. £600k / (£800k + £250k + £200k) * 100 = 48.00%

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.