Why is interest added back to profit before tax when calculating return on total assets?
A) Because interest rates vary over time.
B) To indicate to lenders that some risk is involved.
C) Because the efficient use of resources should be examined independently from the method of financing.
D) Both A and B.
Correct Answer:
Verified
Q2: Which of these is not an efficiency
Q3: R Co had a profit of $100,000
Q4: Operating profit before interest and taxation, divided
Q5: A firm has total assets of $800,000
Q6: Place the key steps in financial ratio
Q7: A firm has total assets of $900,000
Q8: Which ratios measure the degree of risk
Q9: The formula for gross profit margin is
Q10: The incorrect statement concerning financial ratios is:
A)A
Q11: Calculate the return on capital employed if
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