ObjectiveMcq
Print Protected
This page is protected for print. Use the website to view the content.
Which of the following ratios does NOT directly indicate the capital structure of a company?
Correct Answer: D — Return on capital employed
The correct answer is D: Return on capital employed (ROCE).
ROCE measures how efficiently a company generates profit from its capital. It focuses on overall profitability and operational efficiency rather than revealing the proportion of debt vs equity in the capital structure. Debt-equity ratio, financial leverage, and capital gearing ratio all directly analyse capital structure by comparing debt and equity financing.