The following information is available for the Peter Company: $$\begin{array} { l r }
\text { Sales } & \$ 150,000 \
\text { Invested capital } & 156,250 \
\text { ROI } & 10 \%
\end{array}$$ The return on sales is _____.
A)10.00%
B)10.42%
C)62.50%
D)none of these answers is correct

Question

The following information is available for the Peter Company: $$\begin{array} { l r } 
\text { Sales } & \$ 150,000 \
\text { Invested capital } & 156,250 \
\text { ROI } & 10 \%
\end{array}$$ The return on sales is _____.
A)10.00%
B)10.42%
C)62.50%
D)none of these answers is correct

Quizplus · Accepted Answer

The return on sales (ROS) is calculated by dividing the net income by sales. Given the ROI (Return on Investment) of 10% and the invested capital of $156,250, we first find the net income: $ROI = \frac{Net Income}{Invested Capital}$, so $Net Income = ROI \times Invested Capital = 0.10 \times 156,250 = \$15,625$. Then, $ROS = \frac{Net Income}{Sales} = \frac{15,625}{150,000} = 0.1042$ or 10.42%.

The Following Information Is Available for the Peter Company Sales $150,000 Invested capital 156,250 ROI 10%\begin{array} { l r } \text { Sales } & \$ 150,000 \\\text { Invested capital } & 156,250 \\\text { ROI } & 10 \%\end{array} Sales Invested capital ROI ​$150,000156,25010%​

The Following Information Is Available for the Peter Company $\begin{array} { l r } \text { Sales } & \$ 150,000 \\\text { Invested capital } & 156,250 \\\text { ROI } & 10 \%\end{array}$