Read the following information and answer the following question.

From the above details, calculate the return on capital employed.

20%

The correct answer is option 2- 20%.

Return on capital employed = (Net profit before interest and tax/ capital employed) X 100
                                         = 65,000/3,25,000 X 100
                                         = 20%

*Capital employed = non current assets + working capital
                              = 3,00,000 + 25,000
                              = ₹3,25,000

* Net profit before interest and tax = Gross profit - office and administrative expenses - selling and distribution expenses
                                                    = 1,00,000 - 10,000 -25,000
                                                    = ₹65,000