Sum
Net Profit before Interest and Tax ₹6,00,000; Net Fixed Assets ₹20,00,000; Net Working Capital ₹10,00,000; Current Assets ₹11,00,000. Calculate Return on Investment.
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Solution
Net Profit before Interest and Tax = 6,00,000
Capital Employed = Net Fixed Assets + Net Working Capital
= 20,00,000 + 10,00,000 = 30,00,000
`"Return on Investment" = "Net Profit before Interest and Tax"/"Capital Employed" xx 100`
`= 600000/3000000 xx 100 = 20%`
Concept: Types of Ratios
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