Interpretation of Accounts Using Simple Accounting Ratios Equity: Capital Employed - SS2 Accounting Past Questions and Answers - page 1
1
What is capital employed?
View related lesson
A
The amount of money invested in a business by its owners and/or lenders.
B
The amount of money a business has in its bank account.
C
The amount of revenue a business generates in a year.
D
The amount of money a business owes to its suppliers.
2
What is the formula for calculating capital employed?
View related lesson
A
Assets + liabilities
B
Revenue - expenses
C
Equity + loans
D
Net income + dividends
3
Why is capital employed important for businesses?
View related lesson
A
It measures the efficiency and profitability of a business.
B
It helps businesses avoid paying taxes.
C
It determines the size of a business's workforce.
D
It determines the price of a business's products.
4
What is the goal of any business with regard to capital employed?
View related lesson
A
To minimize its capital employed
Â
B
To maximize its capital employed
C
To keep its capital employed constant
D
To ignore the capital employed
6
What is the significance of maximizing the return on capital employed for a business?
View related lesson
Loading lesson…