I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

QUESTION 

Interpreting information VII

 

ROCE has increased from 28% in 20X2 to 35% in 20X3.  

Which of the following statements relating to this increase is/are correct? 

1 

An increase in profit margin in 20X3 could account for the increase in ROCE. 

2 

The increase suggests the company is more efficient in employing its resources in 20X3 compared 

to 20X2. 

3 

If profit margin has remained constant, the increase in ROCE suggests a decrease in asset 

turnover. 

A 

1 and 2 only 

B 

2 and 3 only 

C 

1 and 3 only 

D 

All three statements are correct 

BPP Tutor Toolkit Copy

---

CHAPTER 26  

//

  INTERPRETATION OF FINANCIAL STATEMENTS