Question 1

A cybersecurity firm reports the following financial data for the year:
- Operating Profit (PBIT): $450,000
- Interest expense: $50,000
- Tax expense: $80,000
- Total Assets: $3,000,000
- Current Liabilities: $500,000

Calculate the Return on Capital Employed (ROCE) as a percentage. (Enter number only, do not include the % sign)

Accepted Answer

ROCE = PBIT / Capital Employed. Capital Employed = Total Assets - Current Liabilities.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Using Net Profit (after interest and tax) instead of PBIT, or using Total Assets instead of Capital Employed.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 1

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