Recap Quiz

ROCE stands for:

• Rate of Capital Employment

• Return on Capital Employed

• Ratio of Capitalism and Employment

• Return on Current Equity

What does ROCE measure, and what does a higher ROCE indicate?

• ROCE measures the company's liquidity, and a higher ROCE indicates better liquidity.

• ROCE measures the efficiency of generating profits from capital employed, considering both equity and debt. A higher ROCE indicates better profitability.

• ROCE measures the speed of inventory turnover, and a higher ROCE indicates better efficiency.

• ROCE measures the company's solvency, and a higher ROCE indicates better solvency.

What does Operating Profit Margin represent, and what does it help evaluate in a company?

• Represents the percentage of sales resulting in net profit, and it evaluates overall profitability.

• Represents the percentage of sales retained after deducting the cost of goods sold, and it evaluates liquidity.

• Represents the percentage of sales that result in operating profit, and it helps evaluate a company's operational efficiency.

• Represents the percentage of sales generating dividends, and it evaluates investor returns.

A lower profit margin indicates a healthier financial performance.

• True

• False

What does a higher Gross Profit Margin typically indicate?

• Improved liquidity

• Efficient cost management

• Decreased profitability

• Increased debt