[accaluxa]

Thank you very much for your time 🙂

[accaluxa]

Thank you very much for your quick response.

This example was taken out of BPP Practice and Revision Kit (For exams 01/09/2019 to 31/08/2020)

Exercise 25.6 Page 169

The thing is that for another example, they use Share capital and reserves and Long term borrowings to compute Capital Employed. It does not make sense either.
Below the exercise 25.3 Page 166

Henderson manufactures and sells active wear. Below is a summary of the financial statements for the business 20X1:

Data are expressed in $’000
Sales 3,500
Cost of sales 1,750
Expenses 500
Interest 80
Share capital and reserves 3,200
Long term borrowings 800
Non-current assets 2,800
Receivables 400
Inventory 250
Payables 180

Capital Employed = Share capital and reserves + long term borrowings = 3,200 + 800 = 4,000
or
Capital Employed = Total assets – current liabilities = 2,800 + 400 + 250 – 180 = 3,270

Could you please confirm they this case is similar to the one already mentionned?

Thank you again for your time/help.

[Author]

Posts