Page 20 - A Level Business Studies - Financial Analysis Tasks
P. 20
Return on Equity Employed
Task 4.a
Look at the example of the Statement of Financial Position and calculate the ROEE (Return in
Equity Employed). The Operating Profit was £44,657.
STATEMENT OF FINANCIAL POSITION PLC ("Balance Sheet") - Example Return on Equity
£ £ (Capital) Employed
NON-CURRENT ASSETS (Fixed Assets)
Property 253,000
Equipment 22,000
Vehicles 21,300
296,300
CURRENT ASSETS
Inventory (Stock) 31,700
Trade Receivables (Debtors) 144,267
Cash & Cash Equivalents (Cash & Bank) 13,223
189,190
Less CURRENT LIABILITIES
Trade Payables (Creditors) 155,490
Unpaid Tax 5,000
Dividends 15,000 175,490
Net Current Assets 13,700
Non Current Liabilities (long-term loans) (150,000)
Net Assets (Capital Employed) 160,000
EQUITY (CAPITAL) [Financed By]
Share Capital 115,000
Reserves 45,000
Total Equity 160,000
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