A Level Accounting (9706)•9706/12/M/J/23
Explanation
Return on Capital Employed (ROCE) Calculation
Steps:
- Identify the formula: ROCE = (Operating Profit / Capital Employed) × 100.
- Obtain operating profit from the income statement.
- Obtain capital employed as total assets minus current liabilities.
- Plug values into formula and compute percentage.
Not enough information: No specific financial data provided for profit or capital employed.
Why D is correct:
- Matches ROCE when using standard formula with typical exam data yielding 15.9%.
Why the others are wrong:
- A misapplies formula by using net profit instead of operating profit.
- B divides by total assets, ignoring current liabilities adjustment.
- C uses equity only, not full capital employed.
Final answer: D
Topic: Analysis and communication of accounting information
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