Interpretation of Financial Statements part a – ACCA Financial Accounting (FA) lectures
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If we have enough information to be able to calculate the average then yes. However normally we only know the net assets at the end of the year in the exam and so we use that.
Thank you so much Professor you are the best just passed FA exam today 31/03/23 representing from Ireland/Zimbabwe
Thank you for your comment, and many congratulations 馃檪 馃檪
Hey, why did you use profits from operations and not profit before tax to calculate the net profit ratio?
The company does not control the tax rate and so taking the profit after tax is not measuring how well the company is being run.
Hi john,
So i understand that the company has no control over tax, but that is taken in account after profit, i need to know why you chose “profit from operations” for ROCE when the want the “profit before tax”?
Thank you in advance
Hi John,
is the capital Employed the same as Total Long term Capital?
Why is the ratio called “asset turnover” when you working with sales and long term capital?
Long-term capital is equal to the net assets. I explain the relevance of the measure in the lecture.
Sir asset turnover ratio equals revenue divided by average total assets
Mr. Moffat, i thought equity equals to the net assets, as long-term capital equals to equity+debt(NCA) or maybe I didnt understand it correctly. Could you please clarify it?