All of the following are ways to calculate different versions of ROI except: A. Return on sales x investment turnover B. Income / Investments C. Operating Income / Revenues x Revenues / Total Assets D. Revenues / Total Assets

Question

Maci

Business

6 July, 11:57

All of the following are ways to calculate different versions of ROI except: A. Return on sales x investment turnover B. Income / Investments C. Operating Income / Revenues x Revenues / Total Assets D. Revenues / Total Assets

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Answers (1)

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Lizeth Carey · Answer 1

The answer is D

Explanation:

The formula - Revenues / Total Assets is not one of the ways to calculate Return on Investment (ROI)

Return on Investment (ROI) is a ratio

net profit to cost of investment (total money invested the project or compnay)

The numerator must be profit while the denominator must be related to cost of Investment.

In all of the options, it is only option D that has revenue (sales) as the numerator which makes it automatically wrong.