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 Form 4 Business Studies Online Lessons: Financial Statements

Importance of return on capital

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Answer Text:
Importance of return on capital:
-it reveals how well a business is utilizing the resources it has.i.e it determines the amount of profit made relative to the total resources invested in the business.
-it helps to compare the business performance with another one.
-it helps to compare the business performance over similar period.
-enables potential investors to make an informed decision whether to invest in the company.


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