Ratio analysis

the financial statement of a company for the year ending 31st march,2011:

cash                                        160000

sundry debtors                        400000

short term investment             320000

stock                                       2160000

prepaid expenses                     10000

                                             --------------------

total current assets                     3050000

                                             ---------------------

current liabilities                  1000000

10% debentures                   1600000

equity capital                       2000000

retained earnings                  800000

statement of profit for 31st march,2011:

sales(20%cash sales)         4000000

(-)cost of goods sold              (2800000)

                                             -------------------------

PBIT                                           1200000

(-)interest                                  (160000)

                                             ---------------------------

PBT                                           1040000

(-) tax @ 30                                 (312000)

                                            -----------------------

PAT                                            728000

                                          calculate return on capital employed ?in answer capital employed = 44000000 & my  question how is it possible?please tell me the calculation of capital employed details.

 

Replies (2)

hi future ca

are the details given by u complete?

simply capital employed means equity plus loans

Cap. Emp. = Equity+retained earnings+10% Deb.

Cap. Emp. = 2000000+800000+1600000

Cap. emp. = 4400000

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