A trader has had the following ratios worked out. profit margin: year 1 = 15%, year 2 = 20% return on capital employed (ROCE): year 1 = 9%, year 2 = 6% What accounts for these changes?
- ADrawings have increased by more than profit for the year.
- BGross profit has increased but profit for the year has decreased.
- CProfit for the year has increased and capital has been introduced.
- DProfit for the year has increased and a long-term loan has been repaid.