Question

A firm has the following data: • EBIT: ₹80 lakh • Interest Expense: ₹20 lakh • Total Assets: ₹500 lakh • Equity: ₹300 lakh What is the firm's Return on Capital Employed (ROC

  • E and what does it signify?
A 16% – Good profitability over total capital
B 20% – Indicates asset turnover
C 10% – Indicates solvency
D 25% – Indicates low gearing
E None of the above
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