Comments

  1. avatar says

    Hello …can u help me clarify the asset turnover formula?
    1_ asset turnover: sale/ nca
    Or 2_ asset turnover: sale/total asset
    Or 3_asset turnover: sale/capital employed ?
    4_asset turnover: turnover/capital employed.
    Which of this above should we use in the exam ?

    • Avatar of johnmoffat says

      Usually, asset turnover is sales/total capital employed.

      Turnover and sales are the same thing.
      Capital employed = equity + non-current liabilities (which is always equal to (total assets – current liabilities))

      It can be looked at in more detail by calculating sales/non-current assets. However only do this if the question specifically asks for it. Otherwise calculate as per my first line.

  2. avatar says

    Good night john moffat,

    Can u please help me with this question. u might need to walk me through it.
    Using an interest rate of 10% per year , the net present value (NPV) of a project has been correctly calculated as $50.00.
    If the interest rate is increased by 1% the npv of the project falls by $20.00

    What is the internal rate of interest of the project

    thank you

Leave a Reply