Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 15

Smith Branded Apparel designs t-shirts for businesses and corporations. The accounting manager has presented the latest quarter’s return on sales of 10 percent and asset turnover of 1.5. What is the company’s current return on investment (ROI)?

Step 1 of 4

Return on investment:

Investment return defines that it is the ratio of net income and investment costs. The higher the investment returns the stronger it is and the worse it is if the lower the investment returns.