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Hi sir,
question, calculate the roce.
I was given net assets beginnig of the year and net assets end of the year. What figure I’m I suppose to use?
I’m assumed I was meant to add both and the divide it to get an average net assets but in the Kaplan question bank they used the figure for beginning of the year figure for some reason?
I’m confused which figure use?
Thank you
Provided that the information is available then (unless the question instructs otherwise) the examiner prefers to use the opening net assets. This is on the basis that the assets at the start of the year will have been responsible for earning the profit made during the year.
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