Question : ______________shows the relationship of profit (profit before interest and tax) with Capital Employed.
Option 1: Return on Equity
Option 2: Return on investment
Option 3: Net profit ratio
Option 4: Capital employed turnover ratio
Correct Answer: Return on investment
Solution : Answer = Return on investment
Return on investment (ROI) shows the relationship between profit (profit before interest and tax) and capital employed. It measures the efficiency and profitability of a company's capital investments by indicating the return generated per unit of investment in the business. Hence, the correct option is 2.
Question : What ratios are affected by "Return on Investment"?
Option 1: Gross profit ratio and net profit ratio
Option 2: Earnings per share and net profit ratio.
Option 3: Capital employed ratio and assets turnover ratio
Option 4: Net profit ratio and capital turnover ratio
Question : Which of the following statements is true?
Option 1: Net Profit after tax means Net Profit after interest and tax
Option 2: Net Profit after tax means Net Profit after interest and before tax
Option 3: Net Profit after tax means Net Profit before interest and after tax
Option 4: Net Profit after tax means Net Profit before interest and before tax
Question : Which of the following statements is not correct?
Option 1: Net Profit before Interest and Tax = Net Profit before Tax + Interest on Long-term Borrowings
Option 2: Current Liabilities = Total Debt - Non-current Liabilities
Option 3: Capital Employed = Net Fixed Assets + Trade Investments - Working Capital
Option 4: Accumulated Depreciation is already adjusted in Net Fixed Assets.
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