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bpp mcq 1.3
Asset turnover 10 times
Interest payable $1.5
interest cover ratio 5 times
what is roce?
and they got turnover as $14 how
I am away from home until Tuesday and so I do not have the BPP book with me.
However on what you have written, there turnover is not $14 – that makes no sense at all.
The operating profit is 5 x 1.5M = $7.5M
Therefore the profit margin = 7.5/200 = 3.75%
ROCE = Asset turnover x profit margin = 10 x 3.75% = 37.5%
Are you sure you have copied the question correctly?