(Calculation of return on investment when closing balance sheet is given )
Following is th balance sheet of paliwal exprots ltd as at 31 st march 2019

You are required to calcualte return on investment for the year 2018-19 with reference to opening capital exployed.

Explanation

Return on investment or capital employed =`("net profit before inteest and tax")/("capitl employed")xx100`
`=(Rs 1200000)/(Rs 2400000)xx100=50%`
calculation of net profit before interest and tax:,Rs
Net profit , 972000
Add: Interest on long term borrowing (15% on Rs 1600000),240000
1212000
less: interst on non grade investments (10% on Rs 120000), 12000
net profit before interest and tax , 1200000