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Return on Equity* Return on Capital Employed* Gross profit margin Operating profit margin Interest cover Current ratio 2022 16% 16.35% 37.3% 9.4% 2.9 0.69 2021 29.4% 21.6% 38.7% 13.3% 6 0.71

Return on Equity* Return on Capital Employed* Gross profit margin Operating profit margin Interest cover Current ratio 2022 16% 16.35% 37.3% 9.4% 2.9 0.69 2021 29.4% 21.6% 38.7% 13.3% 6 0.71

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Why could ROE and ROCE move in different directions?

Return on Equity* Return on Capital Employed* Gross profit margin Operating profit margin Interest cover Current ratio Quick ratio Inventories turnover period* Settlement period for accounts receivable* Settlement period for accounts payable* Operating cash cycle Gearing 2022 16% 16.35% 37.3% 9.4% 2.9 0.69 0.03 72.1 days 1.4 days 97.2 days ? 51.5% 2021 29.4% 21.6% 38.7% 13.3% 6 0.71 0.09 62.9 days 1.5 days 89.3 days ? 54.9%
Transcribed Image Text:Return on Equity* Return on Capital Employed* Gross profit margin Operating profit margin Interest cover Current ratio Quick ratio Inventories turnover period* Settlement period for accounts receivable* Settlement period for accounts payable* Operating cash cycle Gearing 2022 16% 16.35% 37.3% 9.4% 2.9 0.69 0.03 72.1 days 1.4 days 97.2 days ? 51.5% 2021 29.4% 21.6% 38.7% 13.3% 6 0.71 0.09 62.9 days 1.5 days 89.3 days ? 54.9%
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