Return on investment can be split into which of the following two measures?
A) Profit margin and net income.
B) Profit margin and investment turnover.
C) Residual income and operating income.
D) Investment center average assets and investment turnover.
E) Investment center income and profit margin.

Question

Quizplus · Accepted Answer

Return on investment (ROI) can be split into two measures: profit margin, which is the ratio of net income to sales, and investment turnover, which is the ratio of sales to average investment. Choice B correctly identifies these two measures. The other choices either include unrelated measures or incorrectly identify the components of ROI.

Return on Investment Can Be Split into Which of the Following