General Studies · Financial Ratios
Cyan Co. carries its property at a revalued amount. Property values have fallen during the current period and an impairment loss has been recognized on the property, though its carrying amount remains higher than its depreciated historical cost. What will be the effect of this impairment on the return on capital employed (ROCE) and the gearing ratios of Cyan Co.?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1ROCE increases, and gearing ratio decreases
- 2ROCE decreases, and gearing ratio increases
- 3ROCE increases, and gearing ratio increases✓
- 4ROCE decreases, and gearing ratio decreases
Correct answer
ROCE increases, and gearing ratio increases
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