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Ken Garrett.
Ken Garrett.-
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zkaay
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hello sir
for calculating ROCE .. if in the q given both beginning and closing figures of total assets and current liabilities
we MUST calculate the average or the closing figures only?
as in sep/dec 2017 q2 named Chicory
in the examiner answer they have used the average CE and this gives totally different result/analysisthan using the closing figures only ..
thanks alot
Ken Garrett
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In financial analysis, the closing figures for CE is most common. That way you can compare the two successive sets of financial statements that are usually published.
Of course, this can lead to distortions eg if new capital had been issued just before year end so is in the CE but there was little chance for profits to be affected.
Generally, I suggest you use closing for simplicity. You shouldn’t lose marks, but take note of any other effects that should be considered either in profits or capital.
zkaay
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