Sales revenue to capital employed

What is meant by Capital employed?

• The total amount of capital used for generating profits

• The number of employees in a business

• The savings of owner only

• The liability and assets of a business

What is the formula to calculate capital employed

The business can improve its The sales revenue to capital employed ratio by

• Increasing salaries

• Increasing sales

• Taking more bank loans

Company A has a Sales Revenue to Capital Employed ratio of 2.0, while Company B has a ratio of 1.5. What conclusion can be drawn?

• Company A is more efficient in utilizing its capital than Company B

• Company B is more efficient in utilizing its capital than Company A

• Both companies are equally efficient

• Both companies are facing liquidity issues

In the Sales Revenue to Capital Employed ratio, what does "Capital Employed" typically include?

• Current Assets

• Total Liabilities

• Fixed Assets

• Share Capital + Reserves + Non-current Liabilities

What does the Sales Revenue to Capital Employed ratio measure?

• Profitability

• Liquidity

• Efficiency

• Solvency

How is the Sales Revenue to Capital Employed ratio calculated?

• Sales Revenue / Total Assets

• Sales Revenue / Total Liabilities

• Sales Revenue / Capital Employed

• Sales Revenue / Equity

When analyzing the Sales Revenue to Capital Employed ratio, which financial statement items are usually considered?

• Cash flow statement items

• Income statement items , Balance sheet items

• Trail Balance

• None of the above

How does a higher Sales Revenue to Capital Employed ratio typically reflect on a company's performance?

• Indicates lower efficiency in utilizing capital

• Indicates higher efficiency in utilizing capital

• Indicates higher liquidity

• Indicates lower profitability

Which of the following factors can influence the Sales Revenue to Capital Employed ratio?

• Changes in market demand

• Changes in the interest rate

• Changes in inventory valuation method

• All of the above