Return on Capital Employed (ROCE) Calculation

Steps:

• Calculate total assets: non-current assets (75,000) + current assets (25,000) = 100,000.
• Determine capital employed: total assets (100,000) - current liabilities (18,000) = 82,000.
• Compute ROCE: profit (28,000) / capital employed (82,000) ≈ 0.3415 or 34%.
• Round to nearest percentage: 34%.

Why C is correct:

• ROCE formula is profit divided by capital employed (total assets minus current liabilities), yielding exactly 34% here.

Why the others are wrong:

• A: Uses profit over total assets (28,000/100,000 = 28%), ignoring liabilities.
• B: Equals profit percentage without denominator adjustment.
• D: Divides profit by non-current assets only (28,000/75,000 ≈ 37%), excluding net current assets.

Final answer: C