Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

During 2017, a company was financed entirely from its equity and reserves, and these combined to $1\,000\,000$. Its return on capital employed (ROCE) stood at $28\%$. On 1 January 2018, the company issued a $10\%$ debenture worth $300\,000$. Over 2018, operating profit rose by $20\%$. No dividends were distributed. What was the ROCE in 2018?

  • A$19.1\%$
  • B$20.9\%$
  • C$23.4\%$
  • D$25.8\%$

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