Which of the following is the correct formula for calculating return on investment (ROI)?
A)Net profit ÷ Sales
B)Gross profit ÷ Sales
C)Operating income ÷ Average total assets
D)Earnings available to stockholders ÷ Number of outstanding shares of stock

Question

Quizplus · Accepted Answer

Return on investment (ROI) can be calculated by dividing the operating income by the average total assets. This gives an indication of how efficiently a company is utilizing its assets to generate income. Options A, B, and D are all incorrect formulas for calculating ROI.

Which of the Following Is the Correct Formula for Calculating