Day: January 20, 2023

Alex plc’s Income Statement showed a profit before interest of £128,000.

Interest paid was £8,000.

The table shows amounts included in the company’s SOFP:

• Non-current assets £485,000
• Net current assets £27,000
• Liability amounts falling due after one year: Debentures £80,000

How much is the return on the total capital employed?

Select ONE answer:

1. 20.3%
2. 21.6%
3. 23.4%
4. 25.0%

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

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

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

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > £128k / (485 + 27 – 80 + 80) = 25%

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