Kit Mcq

This topic has 3 replies, 2 voices, and was last updated 7 years ago by P2-D2.

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May 2, 2019 at 10:36 pm #514815
maxpopper
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Following extracts of F/S of Wiggo have been obtained
Revenue 9800000
COS (530000)
Operating expenses (210000)
Equity 600000
Loan 300000
Deferred tax 44000
Payables 46000

What is ROCE?

Sir here as we know that ROCE is PBIT/CE. And CE = Shareholders equity + NCL

So here I want to ask 1 thing that loan and deferred tax would be considered as NCL or would they be considered as CL? Please can you explain regarding Loan and deferred tax?
May 4, 2019 at 9:11 am #514894
P2-D2
Keymaster
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Hi,

Captial employed is equity plus net debt. Here the equityis the 600,000 and the debt is 300,000.

The deferred tax and payables do not bear any interest and so do not form part of the capital employed calculation.

The net debt is not based upon current/non-current liabilities.

Thanks
May 4, 2019 at 1:34 pm #514916
maxpopper
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1) If loan is short term then it is classified as current liability, right?
2) And if loan is long term (i,e debt) then it is classified as non current liability, right?
May 11, 2019 at 7:06 am #515563
P2-D2
Keymaster
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Hi,

Yes, short-term is effectively a current liability and long-term a non-current liability but they are both debt.

Thanks
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