# Level 4, Credit control Green light Return on capital employed

genesta
Posts:

**21**Registered
Return on Capital employed. All is clear, but no way I can get result as they have..

Please have a look and help me.

Formula: Net operat profit/ Total assets - current liabilities x 100

Sales 2,630

Purchases 1,830

Profit from operations 290

Total current assets 700

Inventory (included in total current assets) 340

Total current liabilities 460

Trade payables (included in total current liabilities) 420

Non-current liabilities 600

Equity 700

Theyr result 22.32%

How did they do?

Please have a look and help me.

Formula: Net operat profit/ Total assets - current liabilities x 100

Sales 2,630

Purchases 1,830

Profit from operations 290

Total current assets 700

Inventory (included in total current assets) 340

Total current liabilities 460

Trade payables (included in total current liabilities) 420

Non-current liabilities 600

Equity 700

Theyr result 22.32%

How did they do?

## Comments

52Registeredi always work out Return on capital employed as Operating profit / divided by Capital Employed (in this case would be Non-current liabilities 600 + equity 700 = 1300)

290/1300 * 100 = 22.31% - not sure why it's 1% out but it's definately the correct way to work it out.

Hope this helps!

21RegisteredI knew its simple and have done it before, but suddenly got confused about capital employed.. as found formula in web...

52Registered