Another ratio query.... Assignment X6.4 expected RoC given with the denominator as Shareholder funds (capital employed) @ BOY But exam paper April 2010 Q5i gives it with denominator as average of SHF @ BOY and EOY Please can you clarify which we should use?
Hi studentmb, Have a look at page 13 of Chapter 25. In theory, you should use post-tax profit / shareholders' funds at the start of the year. Sometimes the examiners don't always do this though, and sometimes you'll have to use different figures if you haven't been given all the information you need. When in doubt though, stick with the figure at the start of the year. Kind regards, Katherine.
